RCM payable without GTA ?

[husen kadwalwala]

Dear sir,

we sell our product FOR to our client companies. for transport we use direct vehicles without the GTA. distance to destination very from 1000-1200 KM. is GTA needed after certain distance ? do we need to pay the RCM for the transport fright ?

Regards

[Sadanand Bulbule]

Dear Sir

Distance is not the compulsion to hire the services of GTA. It's the choice of the consignor of goods. When there is no utilization of services of GTA, the question of RCM does not arise. There is huge difference between the usage of 'direct vehicles' without GC Note and the services of GTA with GC Note as far as the risk and responsibility of goods consigned till they are delivered to the consignee.

[husen kadwalwala]

In this case GTA is not used. and material is sold FOR is there something we need to do regarding GST as RCM is not applicable . i mean to say any declaration so that we dont get charged by GST department .

[Sadanand Bulbule]

Dear Sir

The GST law does not prescribe any declaration for such an eventuality. However the books of account should establish your stand, in case there is an inquiry by the department.

[KASTURI SETHI]

I concur with the reply of Sh. Sadanand Bulbule, Sir.

I further express my views as under :-

GTA is taxable and not GTO.(Goods Transport Operator). Declaration is to be filed by the registered person only (GTA) in two situations :-

(i) Filing option to pay GST under FCM (Form has been amended w.e.f. 27.7.23)

(ii) Filing option to revert under RCM. (This declaration form has been inserted w.e.f. 27.7.23).

AI Summary

Reverse Charge Mechanism under GST not applicable for direct vehicle transport without Goods Transport Agency involvement. A query was raised regarding the applicability of Reverse Charge Mechanism (RCM) under GST for transporting goods using direct vehicles without engaging a Goods Transport Agency (GTA). It was clarified that the use of GTA is not mandatory based on distance, and RCM does not apply if GTA services are not used. No specific declaration is required under GST law for using direct vehicles, but accounting records should support the position in case of inquiries. It was noted that GTA is taxable, and declarations are needed only when opting for GST under Forward Charge Mechanism (FCM) or reverting under RCM.