5% WITH NO ITC - WHO WILL NOT TAKE ITC

[MUTHUKUMARAN K]

Dear Sir / Madam,

Transporter collect and pay 5% GST on transport charges from importers.Who will not take ITC Importer or Transporter? please explain.

with regards

K.Muthu Kumaran

9500098134

AI Summary

Choose 5% GTA GST no ITC for transporter; recipient can claim ITC - 12/18% allows transporter ITC, affecting net cost If a transporter/GTA opts to charge the concessional 5% GST under the specific GTA scheme, the transporter is not permitted to claim input tax credit (ITC) on inputs/expenses. The recipient (importer), if a GST-registered person and otherwise eligible, may claim ITC of the 5% charged on transport services. If the transporter charges standard rate (12%/18%), the transporter may avail ITC on its inputs and reduce its tax liability, while the importer can still claim ITC subject to normal eligibility. The commercial benefit depends on which party can utilise ITC: 18% may be preferable if the transporter's ability to claim ITC lowers overall cost or if the importer can fully utilise the credit.