RCM LIABILITY ON FREIGHT PAID FOR TRANSPORATION OF EXEMPTD GOODS

[Shailander Jain]

A wholesale traders is purchasing Coconut Dry (Exempted Goods) from Andhra Pradesh and paying freight to transporter for movement of Exempted Goods. He is showing the freight amount separately in Profit and Loss ac by name "Freight On exempted Goods".

My Query is :

whether he is liable for payment of RCM u/s 9(3) of CGST Act on freight payment for movement of Exempted Goods.

AI Summary

Reverse charge on freight applies to GTA services regardless of goods' taxability, subject to specified GTA exemptions and invoice conditions.
The person who pays freight for road transport in a goods carriage is treated as the recipient liable to pay tax under the reverse charge for GTA services irrespective of whether the goods transported are taxable or exempt; however, transport of goods qualifying as agricultural produce is exempt under the notification, and where the supplier has registered, opted to pay tax on GTA services and issued a tax invoice with the prescribed declaration, the reverse charge on the recipient does not apply.