3.
When one registered Goods Transport Agency (GTA-1) provides transportation services to another registered GTA (GTA-2), and both have opted to discharge GST under the Reverse Charge Mechanism (RCM), it is important to note that the RCM provisions under Notification No. 13/2017-Central Tax (Rate) are applicable only when services are provided by a GTA to specified categories of recipients such as factories, body corporates, partnership firms, etc. Another GTA is not included in this list of notified recipients. Therefore, when GTA-1 renders services to GTA-2, this transaction does not fall under RCM. Instead, GTA-1 is required to discharge GST under the forward charge mechanism, and must issue a tax invoice charging applicable GST.
GTA-2, in this setup, is not acting as an intermediary as defined under GST. An intermediary typically arranges or facilitates the supply of services between two parties without providing the service on their own account. However, in this case, GTA-2 receives the transportation service from GTA-1 and independently supplies the same service to the end customer by issuing its own consignment note. This indicates that GTA-2 is not arranging services but is instead providing the service as a principal in its own right. Therefore, the subsequent supply from GTA-2 to the end customer, if made to a notified recipient under RCM, will attract GST under RCM and the end customer will be liable to pay the tax.
The existence of a formal agreement between GTA-1 and GTA-2 may clarify commercial terms, but the tax treatment depends primarily on the nature of the supply and the status of the recipient under the GST framework. In summary, GTA-1 must charge GST under forward charge to GTA-2, and GTA-2’s onward supply to the end customer will be liable under RCM if the customer falls within the notified category.