GST rate on freight paid under RCM

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Rakesh Sharma (Querist)
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24 July 2017 respected experts, We are giving freight of rs. 52500/- to local union (no vehicle is in the name of union). The union hires the vehicle and send it to our premises with bilty in the name of union. I think as per GST act it is not a GTA. Sir, what will be rate of GST in above case & ITC? please advise me sir. It's very very urgent. regards, Rakesh Sharma

CA Sukesh Bhatia

CA Sukesh Bhatia (Expert)
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24 July 2017 Basically, GTA is providing service to Union and Union is recovering freight charges from you. GST is paid by Union under RCM @5%

CA Sukesh Bhatia

CA Sukesh Bhatia (Expert)
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24 July 2017 Basically, GTA is providing service to Union and Union is recovering freight charges from you. GST is paid by Union under RCM @5%

CA Sukesh Bhatia

CA Sukesh Bhatia (Expert)
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24 July 2017 Is Union recovering same @5% from you?

Rakesh Sharma

Rakesh Sharma (Querist)
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24 July 2017 no sir, union is unregistered

Rakesh Sharma

Rakesh Sharma (Querist)
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24 July 2017 Sir, please reply. Its urgent. I have to deposit 5% or 18% under RCM

Rakesh Sharma

Rakesh Sharma (Querist)
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24 July 2017 Sir, Please reply to help me

CA Sukesh Bhatia

CA Sukesh Bhatia (Expert)
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24 July 2017 Dear Rakesh,

To whom GTA is raising invoice?

Saket Agarwal

Saket Agarwal (Expert)
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24 July 2017 As per Explanation(a) to reverse charge notification - 13/2017 Central Tax (Rate) dated 28-06-2017:
"The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification."

If you (Rakesh Sharma) are the person "liable" to pay freight then you will be considered as the recipient of GTA service. Accordingly, if you are the recipient of GTA service then you will be required to pay GST on reverse charge basis.

I have assumed that your business is one of the categories mentioned in the RCM notification (eg you are a registered factory or you have taken GST registration etc.)

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Rakesh Sharma

Rakesh Sharma (Querist)
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24 July 2017 thanks to all sir.

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