Clarification on Tax Liability under RCM in case of Services Provided by One Registered GTA to Another Registered GTA

[DIVYESH GANDHI]

We seek your clarification on the applicability of GST under the Reverse Charge Mechanism (RCM) in the following scenario:

1. GTA-1 is a GST-registered Goods Transport Agency (GTA) that has opted to pay GST under RCM, and issues a consignment note.

2. GTA-2 is also a GST-registered GTA, which has likewise opted to discharge GST under RCM, and also issues a consignment note to the end customer.

3. GTA-1 provides goods transportation service to GTA-2, and thereafter GTA-2 supplies the same transportation service to the end customer (e.g., manufacturer, body corporate, etc.), who falls under the specified category liable under RCM.

AI Summary

Reverse Charge Mechanism applicability: inter GTA transport is taxed under forward charge; RCM depends on end recipient status.
Services supplied by one registered GTA to another do not attract the Reverse Charge Mechanism (RCM) because a GTA is not a notified recipient; such inter GTA supplies require taxation under the forward charge with issuance of a tax invoice. Whether the subsequent supply from the receiving GTA to the end customer falls under RCM depends on the end customer's status as a notified recipient, and the characterisation of GTA-2's role (principal versus intermediary) is determined by the factual nature of the supply and supporting agreements.