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Reverse charge & composite supply

17 September 2017

Dear Sir,
I have query about reverse charge in GST. We do supply bricks from Haryana to Delhi. It's a composite supply includes cost of bricks, freight and loading unloading of bricks. GST on our bricks is 5%
Sample bill structure
10000 bricks x 4 = ₹40000
Truck carriage. = ₹ 22000
Laboratory loading unloading = ₹4000
Sub-total = ₹66000
IGST @ 5% = ₹3300
Total bill amount = ₹69300

The truck from we send bricks are unregistered single fleet owner and labor too is not permanent & unregistered. Now, query is the amount credited in our books is more than 5000₹ including freight & labor but we are already paying GST on this unregistered dealers or service provider. Still, do we need to pay reverse charge on truck freight & labor?

Thanks,
Mohit Jalan
9813684413
Lucky.iitg @ gmail.com

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15 Replies

RAJA P M ("Do the Right Thing...!!!") (127162 Points)
Replied 17 September 2017

Actually above said Calculation is your sale bill value....!

Am I right...?

Mohit Jalan (33 Points)
Replied 17 September 2017

Brick is the principal supply Amounting Rs. 40000

Associated supply Truck Freight Rs. 22000

Associated Labor charges Rs. 4000

Sub- total Rs. 66000

IGST @ 5% on principal supply i..e. bricks Rs. 3300 (5% of Rs. 66000)

Total Rs. 69300 ( Sale Bill Value)

Mohit Jalan (33 Points)
Replied 17 September 2017

@ Rajai Ji

Brick is the principal supply Amounting Rs. 40000

Associated supply Truck Freight Rs. 22000

Associated Labor charges Rs. 4000

Sub- total Rs. 66000

IGST @ 5% on principal supply i..e. bricks Rs. 3300 (5% of Rs. 66000)

Total Rs. 69300 ( Sale Bill Value)

Mohit Jalan (33 Points)
Replied 17 September 2017

@ Rajai Ji

Brick is the principal supply Amounting Rs. 40000

Associated supply Truck Freight Rs. 22000

Associated Labor charges Rs. 4000

Sub- total Rs. 66000

IGST @ 5% on principal supply i..e. bricks Rs. 3300 (5% of Rs. 66000)

Total Rs. 69300 ( Sale Bill Value)

Mohit Jalan (33 Points)
Replied 17 September 2017

@ Raja Ji

Brick is the principal supply Amounting Rs. 40000

Associated supply Truck Freight Rs. 22000

Associated Labor charges Rs. 4000

Sub- total Rs. 66000

IGST @ 5% on principal supply i..e. bricks Rs. 3300 (5% of Rs. 66000)

Total Rs. 69300 ( Sale Bill Value)

Mohit Jalan (33 Points)
Replied 17 September 2017

@ Raja Ji

Brick is the principal supply Amounting Rs. 40000

Associated supply Truck Freight Rs. 22000

Associated Labor charges Rs. 4000

Sub- total Rs. 66000

IGST @ 5% on principal supply i..e. bricks Rs. 3300 (5% of Rs. 66000)

Total Rs. 69300 ( Sale Bill Value)

Mohit Jalan (33 Points)
Replied 17 September 2017

@ Raja Ji

Brick is the principal supply Amounting Rs. 40000

Associated supply Truck Freight Rs. 22000

Associated Labor charges Rs. 4000

Sub- total Rs. 66000

IGST @ 5% on principal supply i..e. bricks Rs. 3300 (5% of Rs. 66000)

Total Rs. 69300 ( Sale Bill Value)

RAJA P M ("Do the Right Thing...!!!") (127162 Points)
Replied 17 September 2017

Actually your invoice values get Tax from your customer.

After the receipts or Supplied you ll be give above said charges to the Labour and freight then its under RCM...

Its mean, Your invoice values are your supply and You collect tax from Customer...

After you give charges then its your expenses or Inward supplies from URD. You pay tax under RCM basis.

Why I said this way...?

Bcoz, you are collect Freight 22000 and Labour 4000.

But, You can give labour 5000 or 3000. The same is Freight. So, Which amount you ll be give (Not received) that only calculated...

(Why it reflected many more times)

Mohit Jalan (33 Points)
Replied 17 September 2017

Sir, As already we have received 5% gst on truck freight and labor expense from our customers/clients and paying it in GST returns. Still, do we need to pay reverse charge @ 18% on truck freight and labor expense this shouldn't be 13% (18%-5%already paid) .

Secondly,

In GSTR3B We are paying tax (output-Input) so reverse charge would be our liability in output and simultaneously we are showing them in input also. Effectively we are not paying RCM any time, is it just the cross entry in tax liability and tax input everytime or later on this GSTR 3 B returns wont be there just GSTR1 and 2 only in that case we would be paying reverse charge in GSTR 1 and then input tax credit in GSTR 2.

RAJA P M ("Do the Right Thing...!!!") (127162 Points)
Replied 17 September 2017

@ Mohit...

Your above said calculation (18%-5%) 5% already paid is exactly wrong. You are collect from Customer. Its not paid. The collected amount is in your pocket...

Please reply...

After delivered What amount exactly you ll give to Freight and Labour...?

Mohit Jalan (33 Points)
Replied 17 September 2017

Sir,

We will be giving Rs. 22000 & Rs. 4000 respectively to Truck fleet owner and labor. And tax we would be paying in our Tax liability according to GSTR 1.

Mohit Jalan (33 Points)
Replied 17 September 2017

@ Raja Ji

Sir, tax collected from customer on Truck freight & labor would be paid by us in GST return it will be temporarily in our pocket till the time due date of our liability of paying tax doesn't come. And, in case the customer doesnt do payment to us for long then also we have to pay freight to truck owner and pay to labor and pay tax in GSTR3B /GSTR1 . Truck freight and labor doesn't have any relation to our customer they will deal with us only everytime.

1 Like

RAJA P M ("Do the Right Thing...!!!") (127162 Points)
Replied 17 September 2017

Yes... I accept your opinion...

Yes. You ll be pay tax under RCM basis....

If the truck owner/Freight receiver is other than GTA then RCM can't applicable...

Mohit Jalan (33 Points)
Replied 17 September 2017

@ Raja ji

"If the truck owner/Freight receiver is other than GTA then RCM can't applicable"

In our case truck owner is a single fleet owner that is not GTA and not registered even. Still RCM @ 18 % would be applicable?

Sir Pls answer my this query too

Hope this will conclude our discussion on it.