How can a GTA has RCM and FCM both? Can it be via 2 GSTIN of same firm in same city??

[Vibhor Agrawal]

Dear Fellow members,

A unregistered GTA is running business of transportation under tenders with government companies and GST is paid via RCM by Company.

In a new tender GTA wants to register under GST and pay GST under Forward Charge.

What options does GTA has?

Option 1:  According to my understanding GTA can register under GST and ask exisiting Tender companies to transit from RCM to FCM. But the tender companies doest change the RCM to FCM in middle of the existing tender.

Option 2: Can the GTA now apply for 2 separate GST numbers in the same city and keep 1 GSTIN for RCM and another for Forward Charge? If yes, is it legally allowed and can we quote any Notification/ Clarification to the GST department in case of query? Please share the link.

Any other suggestion is highly appreciated. Thank you!

[KASTURI SETHI]

Option 2: Can the GTA now apply for 2 separate GST numbers in the same city and keep 1 GSTIN for RCM and another for Forward Charge? If yes, is it legally allowed and can we quote any Notification/ Clarification to the GST department in case of query? Please share the link.

Ans. There is no such requirement to apply for two separate GST registrations.  After 18.7.22, GTA can adopt both procedures. GTA can pay 5% (without ITC) and 12% with ITC under FCM. In this situation, GTA will have to proportaionately reverse ITC against the outward supply @5% GST.

See serial no.9(iii)(b) of Notification No. 11/17-CT (R) dated 28.6.17 as amended vide Notification No. 3/22-CT(R) dated 13.7.22 effective from 18.7.22.

[Vibhor Agrawal]

Dear Sir, Thank you for the reply.

Sir this applies in case GTA registers under FCM and FCM only and chooses to pay 5% without ITC and 12% with ITC.

Sir what will be scenario if GTA doesnt pay 5% gst (without ITC) under FCM but the company paying the freight pays 5% gst under RCM on behalf of GTA. And for new contracts GTA needs to pay under FCM. So the case is 1 business contract for RCM and another for FCM.

[KASTURI SETHI]

One business contract for RCM and another business contract for FCM. is possible. In simple words, GTA can pay GST on some invoices @5% and on remaining invoices @ 12%. Two separate business contracts by one company does not require two separate GSTINs.

If any doubt, elaborate your query further.

[Shilpi Jain]

The GTA can opt for FCM by submitting the declaration in Annexure V to the rate notification. In the same registration one cannot have both RCM and FCM options. 

AI Summary

GTA GST treatment: ability to use reverse charge and forward charge on different contracts without separate GST registrations. Practitioners advise that after the 18 July 2022 amendment a GTA may elect FCM and choose either a reduced rate without ITC (necessitating proportionate ITC reversal) or standard rate with ITC; many practitioners also state a single GST registration can be used to invoice some contracts under RCM (recipient pays tax) and other contracts under FCM (GTA charges tax), so obtaining two GSTINs in the same location is not required, although one respondent contends the FCM opt-in declaration precludes combining RCM and FCM in the same registration.