Can a Businessman do GTA Business under RCM with another trading business with FCM

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This query is : Resolved

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A client with four trucks, currently unregistered for GST, plans to start a new trading business. They intend to buy an additional truck for this trading activity and claim Input Tax Credit (ITC) on it. The plan is to operate both the Goods Transport Agency (GTA) services under Reverse Charge Mechanism (RCM) and the trading business under Forward Charge Mechanism (FCM) under a single GST registration. The query seeks confirmation on the GST compliance and potential future issues with this dual-business model, particularly regarding ITC utilisation and monthly reversals.

Vijay Dakhvani

Vijay Dakhvani (Querist)
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15 February 2024 Hello Experts !!
one of my client have 4 trucks and he is providing service of goods transportation and he is not register in GST till date .
Now he wants to start another business of trading for which he will have need of a truck for supplying the trading goods. so he is will buy another truck for the trading work activity.
he will be liable for GST registration and he will buy that new truck and will take ITC of GST as capital goods .

now we have 2 businesses with single GST registration and we will operate those businesses under GST as per below :

1. GTA Business : Under RCM
2. Trading Business : Under FCM (we will take whole ITC of new truck as per rule 43 and reverse the monthly ITC in the proportionate of supply (sales) under RCM (exempt ) and FCM.

Please suggest me ,is this practice good or as per GST provisions ?
If any problem will occur in near future , than please let me know.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 February 2024 No problem will occur in future.

Message likes : 1 times

CA Parul Saxena

CA Parul Saxena (Expert)
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17 February 2024 I think you will charge freight from your buyer alongwith Sale value of goods...then i think there is no question of RCM in trading business

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