We pay the RCM on GTA @5%, where as In Invoices we are charging 18% based on SAC code 996711 as outward freight. so far from July-2017 to till date we have not claimed Input credit for the RCM paid on GTA. But now auditors are telling to claim input credit since we are not service provider or GTA. is it valid ???.
29 August 2018
Your Auditor is right . As per Notification No 5/2017-Central Tax, - GST payable at 5% on GTA service will be payable by the service receiver under RCM and the input credit will also be taken by the service receiver..
The notification of 5/2017 CentralGovernment hereby specifies the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the said Act as the category of persons which means both are under same business??