Gta
This query is : Resolved
05 October 2018
GTA transporting goods to govt.dept.who is unregistered.GTA issue invoice in the name of govt.dept.but the supplier,regd.person makes advance payment of freight.As the freight bill is issued in the name of govt.dept.,will the govt.dept.be
considered as the recipient of service?or the regd.supplier is treated as recipient of service for making actual payment?In this case who will pay gst and can the regd.supplier avail ITC?
considered as the recipient of service?or the regd.supplier is treated as recipient of service for making actual payment?In this case who will pay gst and can the regd.supplier avail ITC?
06 October 2018
please reply it.
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12 July 2024
In the scenario where a Goods Transport Agency (GTA) is transporting goods to a government department (which is unregistered), and the GTA issues the freight invoice in the name of the government department, but the registered supplier makes an advance payment for the freight, the GST implications can be understood as follows:
### Recipient of Service:
1. **Recipient of GTA Service**: According to GST rules, the recipient of GTA service is generally the person who pays or is liable to pay freight. In your case:
- The GTA issues the freight invoice in the name of the government department (recipient mentioned on the invoice).
- However, the registered supplier (who is the consignor of the goods) makes the advance payment for the freight.
2. **Consideration for GST Purposes**:
- **Recipient Consideration**: Since the GTA issues the invoice in the name of the government department, for GST purposes, the government department is considered the recipient of the service.
- **Advance Payment**: Even though the registered supplier makes the advance payment, the consideration for GST liability is based on who is liable to pay or who actually pays the freight charges to the GTA.
### GST Liability and Input Tax Credit (ITC):
- **GST Liability**: The GTA will charge GST on the freight charges and issue an invoice to the government department. The government department (as recipient) is liable to pay GST to the GTA.
- **Input Tax Credit (ITC)**:
- **Registered Supplier**: The registered supplier can avail Input Tax Credit (ITC) on the GST paid to the GTA, provided the supplier has received the tax invoice from the GTA and the supplier is using the transportation service for business purposes (furtherance of business).
- **Government Department**: Since the government department is not registered under GST, it cannot avail ITC. The GST paid by the government department will be a cost to them.
### Conclusion:
In summary:
- The government department is considered the recipient of the GTA service for GST purposes because the GTA issues the invoice in their name.
- The registered supplier (consignor) making the advance payment does not change the recipient status under GST law.
- The GTA will charge GST to the government department, and the registered supplier can avail ITC on the GST paid, assuming all other conditions for claiming ITC are met.
This arrangement ensures that GST compliance is correctly aligned with who pays or is liable to pay for the GTA service, as per GST rules.
### Recipient of Service:
1. **Recipient of GTA Service**: According to GST rules, the recipient of GTA service is generally the person who pays or is liable to pay freight. In your case:
- The GTA issues the freight invoice in the name of the government department (recipient mentioned on the invoice).
- However, the registered supplier (who is the consignor of the goods) makes the advance payment for the freight.
2. **Consideration for GST Purposes**:
- **Recipient Consideration**: Since the GTA issues the invoice in the name of the government department, for GST purposes, the government department is considered the recipient of the service.
- **Advance Payment**: Even though the registered supplier makes the advance payment, the consideration for GST liability is based on who is liable to pay or who actually pays the freight charges to the GTA.
### GST Liability and Input Tax Credit (ITC):
- **GST Liability**: The GTA will charge GST on the freight charges and issue an invoice to the government department. The government department (as recipient) is liable to pay GST to the GTA.
- **Input Tax Credit (ITC)**:
- **Registered Supplier**: The registered supplier can avail Input Tax Credit (ITC) on the GST paid to the GTA, provided the supplier has received the tax invoice from the GTA and the supplier is using the transportation service for business purposes (furtherance of business).
- **Government Department**: Since the government department is not registered under GST, it cannot avail ITC. The GST paid by the government department will be a cost to them.
### Conclusion:
In summary:
- The government department is considered the recipient of the GTA service for GST purposes because the GTA issues the invoice in their name.
- The registered supplier (consignor) making the advance payment does not change the recipient status under GST law.
- The GTA will charge GST to the government department, and the registered supplier can avail ITC on the GST paid, assuming all other conditions for claiming ITC are met.
This arrangement ensures that GST compliance is correctly aligned with who pays or is liable to pay for the GTA service, as per GST rules.
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