Reverse Charge Mechanism on Freight

[Harsh]

Whether RCM on Freight Paid to Good Transport Agency Will be Applicable if Goods transported are Nil Rated/Exempt

[Ryan Vaz]

Yes, RCM on GTA freight is applicable even if the goods transported are nil-rated or exempt, unless the GTA service itself is specifically exempt under Notification 12/2017-CTR.
The taxability of GTA service is independent of the GST rate on goods. Exemption depends on who pays freight, value thresholds, and nature of GTA service, not on whether goods are taxable or exempt.

AI Summary

GTA freight paid by recipients under reverse charge: GST still due even when transported goods are exempt or nil-rated Reverse charge liability on freight paid to a goods transport agency is stated to apply even where the underlying goods transported are nil-rated or exempt, because the taxability of the GTA service is treated as independent of the GST rate applicable to the goods. The only stated limitation is where the GTA service itself is exempt, including exemptions referenced under Notification 12/2017-CTR. Applicability and exemption are stated to turn on factors such as the person liable to pay freight, prescribed value thresholds, and the nature of the GTA service, rather than the tax status of the goods, with the consequence that the recipient may still be required to discharge GST under RCM on the GTA freight.