Ajay Kumar Maggidi
Quick Summary
Starting W.E.F today, i.e. 18-07-2022, GTA dealers may choose option to discharge the tax under forward charge.
Let us have a look at what are the changes and how does it impacts.
Brief Background
- 47th GST council recommend an option, GTA may choose to discharge tax under forward charge.
- To give the effect such recommendation, CBIC has issued,
- Notification No. 3/2022–CT (Rate) dated. 13.07.2022.
What are the conditions to avail these options by GTA?
GTA tax payers may avail this option by making declaration in Annexure V with the jurisdictional GST Authority.
What are the timelines to submit Annexure V?
- For F.Y 22-23 – on or before 16-08-2022
- For subsequent F.Y- on or before 15th March of the preceding F.Y.
Declaration in the Invoice
GTA taxpayers who chooses to pay tax under Forward Charge shall declare the following in their invoices.
I/we have taken registration under the CGST Act, 2017 and have exercised the option to pay tax on services of GTA in relation to transport of goods supplied by us during the Financial Year _____ under forward charge.
Impact Analysis
If GTA suppliers chooses to discharge the tax under forward charge:
- No need to pay GST under RCM by recipient.
- Please ensure to obtain filed Annexure V from supplier.
- Please verify supplier has made above declaration in their invoice.
- Please claim ITC even if GTA discharge GST on forward charge.
FAQ :
The option for GTA dealers to discharge tax under forward charge became available starting from 18th July 2022.
GTAs must make a declaration in Annexure V with their jurisdictional GST Authority to avail this option.
For the financial year 2022-23, Annexure V must be submitted on or before 16th August 2022.
Invoices must declare that the GTA has registered under the CGST Act, 2017, and has chosen to pay tax on GTA services under forward charge for the relevant financial year.
If a GTA supplier chooses to discharge tax under forward charge, the recipient does not need to pay GST under the Reverse Charge Mechanism (RCM). They should, however, obtain Annexure V from the supplier and verify the invoice declaration.
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