GTA
This query is : Resolved
09 August 2017
today I have received a bill of transport .he added 5% CGST only
can I claim input ?
he is from Gujarat
I am in blore
I don't know how he charged CGST on inter state supply
any how if it's IGST can I claim input of that IGST 5%
27 July 2024
The situation you’ve described involves a Goods Transport Agency (GTA) that has charged CGST on an inter-state supply of transportation services. Here’s how to handle this situation under the GST regime:
### **1. Understanding the GST on GTA Services**
Under GST, the transportation of goods by a Goods Transport Agency (GTA) is generally taxable. The applicable GST rate is 18%, with an abatement of 70% allowed for GTA services, making the effective tax rate 5.4% on the abated value (30% of the total value).
### **2. CGST vs. IGST on Inter-State Supply**
**In the context of inter-state supplies:**
- **IGST Applicability**: For inter-state supplies, the GST should be charged as Integrated GST (IGST) and not as Central GST (CGST) and State GST (SGST).
- **Billing Error**: If you received a bill with only 5% CGST for an inter-state supply, it is likely an error, as IGST should be applicable.
### **3. Claiming Input Tax Credit (ITC)**
**For the Scenario Described:**
- **If IGST was Charged**:
- **Claim ITC**: You can claim Input Tax Credit (ITC) for the IGST charged on the bill, provided the service is used for business purposes and you have the proper invoice.
- **Action**: Ensure that the supplier corrects the invoice to reflect IGST instead of CGST if it was mistakenly charged.
- **If CGST was Charged**:
- **Input Credit Issue**: CGST should not be charged on an inter-state supply. If CGST is charged, it indicates an error in billing.
- **Corrective Steps**: Request the supplier to issue a revised invoice with IGST for the inter-state supply. You should not claim ITC on CGST charged on an inter-state supply as it is not valid.
### **4. Reporting and Compliance**
- **For Correct IGST**:
- Ensure that the invoice with IGST is correctly reflected in your GSTR-2A and then claim the ITC in your GSTR-3B.
- **For Incorrect CGST**:
- Contact the supplier for a corrected invoice. The original invoice with CGST should be corrected to show IGST.
### **Summary**
- **Inter-State Supply**: The correct tax on inter-state supply should be IGST, not CGST and SGST.
- **Input Tax Credit**: You can only claim ITC on IGST charged. CGST charged on inter-state supply is incorrect and should be corrected.
- **Action Required**: Contact your supplier to issue a revised invoice with IGST. Ensure that you claim ITC only on properly issued IGST invoices.
Ensuring correct tax treatment and proper documentation will help you maintain compliance and optimize your input tax credits. If you face difficulties or need further clarification, consider consulting a tax advisor for tailored advice.
### **1. Understanding the GST on GTA Services**
Under GST, the transportation of goods by a Goods Transport Agency (GTA) is generally taxable. The applicable GST rate is 18%, with an abatement of 70% allowed for GTA services, making the effective tax rate 5.4% on the abated value (30% of the total value).
### **2. CGST vs. IGST on Inter-State Supply**
**In the context of inter-state supplies:**
- **IGST Applicability**: For inter-state supplies, the GST should be charged as Integrated GST (IGST) and not as Central GST (CGST) and State GST (SGST).
- **Billing Error**: If you received a bill with only 5% CGST for an inter-state supply, it is likely an error, as IGST should be applicable.
### **3. Claiming Input Tax Credit (ITC)**
**For the Scenario Described:**
- **If IGST was Charged**:
- **Claim ITC**: You can claim Input Tax Credit (ITC) for the IGST charged on the bill, provided the service is used for business purposes and you have the proper invoice.
- **Action**: Ensure that the supplier corrects the invoice to reflect IGST instead of CGST if it was mistakenly charged.
- **If CGST was Charged**:
- **Input Credit Issue**: CGST should not be charged on an inter-state supply. If CGST is charged, it indicates an error in billing.
- **Corrective Steps**: Request the supplier to issue a revised invoice with IGST for the inter-state supply. You should not claim ITC on CGST charged on an inter-state supply as it is not valid.
### **4. Reporting and Compliance**
- **For Correct IGST**:
- Ensure that the invoice with IGST is correctly reflected in your GSTR-2A and then claim the ITC in your GSTR-3B.
- **For Incorrect CGST**:
- Contact the supplier for a corrected invoice. The original invoice with CGST should be corrected to show IGST.
### **Summary**
- **Inter-State Supply**: The correct tax on inter-state supply should be IGST, not CGST and SGST.
- **Input Tax Credit**: You can only claim ITC on IGST charged. CGST charged on inter-state supply is incorrect and should be corrected.
- **Action Required**: Contact your supplier to issue a revised invoice with IGST. Ensure that you claim ITC only on properly issued IGST invoices.
Ensuring correct tax treatment and proper documentation will help you maintain compliance and optimize your input tax credits. If you face difficulties or need further clarification, consider consulting a tax advisor for tailored advice.
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