GST INPUT ON GTA BILL WITH 5% INVOICE

[X Y]

XYZ Private Limited, a registered person under GST, received Tax Invoice from GTA with 5% tax. Whether XYZ P Ltd, is liable to pay RCM on its own or pay it to GTA as per his invoice and take Input credit. Whether XYX P Ltd is eligible to take ITC on transaction where RCM is applicable. Please reply.

[Sadanand Bulbule]

Dear querist

An option to pay tax under FCM is given to the GTA. Rate of tax is 5% without ITC or 12% with ITC.

In your case, XYZ P Ltd need not pay tax again under RCM since it is already charged by the GTA in his tax invoice under FCM. As regards to second situation, it can pay tax under RCM and take ITC.

[Ganeshan Kalyani]

Yes, the GTA has an option to opt for forward charge wherein he will charge GST on his invoice. In such case, the recipient is not liable to pay GST under reverse charge. The recipient can claim ITC basis the invoice from GTA. 

[Shilpi Jain]

GTA is required to give a declaration to the department in prescribed form in case he wishes to opt to pay under FCM. If that is done the GTA will pay GST and recipient need not pay.

ITC would be eligible provided other conditions in the law are satisfied.

[KASTURI SETHI]

ITC is admissible in this scenario. I concur with the views of the experts.

AI Summary

GST reverse charge: recipient not liable when transporter charges GST under forward charge; input credit claimable.
When a Goods Transport Agency elects the forward charge option and issues a tax invoice charging GST, the recipient need not pay tax under the reverse charge mechanism and may claim input tax credit subject to usual ITC conditions. The GTA must file the prescribed declaration to opt for forward charge. If the GTA does not charge under forward charge, the recipient remains liable under RCM and may claim ITC only if statutory conditions are met.