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GST on transport of goods

30 June 2017

As we are manufacturer, we purchase raw materials and paid freight to driver or transporter. If transporter is unregistered then will we pay gst under RCM. Can we claim as itc?
Or, if transporter is registered, and he charged 5% of gst, will it available for itc for us?

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29 Replies

rocky (accountant) (948 Points)
Replied 30 June 2017

if you are registered, then you have to pay tax by RCM method, whether GTA is registered or not
you will get input of your paid tax

2 Like

CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 30 June 2017

yes..in both the case input credit is available..

2 Like

Bikash Thakur (CA) (120 Points)
Replied 30 June 2017

Thank sir, for both of your reply, but there is a little bit confusion yet, as per schedule for gst rate for services, it shows under gta with rate 5% No ITC. Please clarify, if any notification found please attached.

1 Like

LALIT (PROP.) (32 Points)
Replied 30 June 2017

u will not liable for itc

LALIT (PROP.) (32 Points)
Replied 30 June 2017

paid gst on transport is not allowed for itc

Santosh Choubey (2 Points)
Replied 30 June 2017

sir we are Trading concern and we purchase good on cst and paid to transporter service tax on the 15% on 30 % amount of friegth , now what I have to do

Bikash Thakur (CA) (120 Points)
Replied 30 June 2017

here also start the confusion, @ akhilesh kumar kandpal and rocky jee, you have any notification about it. thanks lalit ji for ur concern. but this matter is doubtful.

CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 30 June 2017

no itc written is not mean that service receiver will not get itc....it means in the case when gta service provider is not eligible to take credit as.......the rate 5% is lower than normal rates of service tax hence it has been disallowed to take gst credit to gta service provider......for service receiver their is no mention that he will no receive itc......it is clear in itself....I don't think any notification will be or has been issued for that.

2 Like

Bikash Thakur (CA) (120 Points)
Replied 30 June 2017

many thanks akhilesh kandpal jee, you have clear my concept. Thank You

Santosh Kumar Pathak (CEO) (37 Points)
Replied 30 June 2017

right

RAKESH KUMAR (Accounts Executive) (24 Points)
Replied 30 June 2017

Sir for freight i have to show in invoice as freight outward or to make another invocice for that . And which rate i have to show either goods rate or 5% with another bill? And how to take ITC?

CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 30 June 2017

It is on you how you show frieght.....you can either charge frieght separately from your customer or you can include it in the price of goods itself.......
if you don't show it separately and include it in the price of goods than it will fall under the composite supply and the rate of gst applicable to goods will be applicable......
if you show it separately than there are two opinion.....first is that it is still composite supply as there is NO such condition that to qualify for composite supply one price should be charged and hence gst rate on goods will be applicable on whole amount......another view is that since separate rates are charged hence it is not composite supply and hence different rate of gst to be charged (on goods rate of gst on that good and on frieght the rate of transportation service)....if reading strictly the language of the cgst act first view has more weight....since no clarification is available yet you can go with what is more beneficial to you in term of tax liability...
in any case you need not to issue separate invoice for freight charges..you can but it will be inefficient.

1 Like

CA NEHA RAMPURIA (Taxation Consultant) (1823 Points)
Replied 01 July 2017

Sir, you are right that the recipient would get the credit, but there's an exemption that transportation of goods by road is exempted except provided by gta, courier services, so don't you think since this service is exempted the recipient would also not get credit as its service is exempted

Ronak Jain (Industrial Trainee) (29 Points)
Replied 01 July 2017

Hello sir,

we are doing business as an authorised transporter with a public limited company. We do not own any vehicles. We hire trucks from the market, and supply the goods through them, We charge freight from company, pay the vehicle owner and keep the difference between freights as our profit. Our turnover is more than 75 lakhs per annum.

What is the applicability of GST act on our business ???

Please let me know as soon as possible.

Thanks.