ITC AVAILABILITY FOR GTA COMPANY

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This query is : Resolved

Quick Summary

A GTA company currently operating under 100% Reverse Charge Mechanism (RCM) is seeking to understand if it can switch to a forward charge agreement, allowing it to issue taxable invoices and claim Input Tax Credit (ITC) on heavy vehicle purchases. The discussion clarifies that ITC is not permissible under 100% RCM. While switching to forward charge (12% GST) is an option, it may impact customer retention. Crucially, ITC on vehicles purchased during the RCM period cannot be claimed retrospectively when moving to forward charge.

CA SASHI KANT SHARMA

CA SASHI KANT SHARMA (Querist)

22 March 2022 Dear Sir,

Please provide solution to a problem, A GTA Company who Currently operate under 100% RCM, Whether it can enter into forward charge agreement or contract in which it issue Taxable invoice and can take ITC on Heavy Vehicle Purchased?
If can not than what other option available to company to take ITC on Vehicle Purchased for Transporting of Goods in the course or furtherance of Bussiness?

Thanking You,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

22 March 2022 100% RCM no ITC can be taken.
If you want to take ITC charge 12% GST forward charge 100%.

Message likes : 2 times

CA SASHI KANT SHARMA

CA SASHI KANT SHARMA (Querist)

23 March 2022 Thank for the Reply sir, I want to Know whether the GTA can take ITC on vehicle purchased on oct 2021, at that time it was covered under 100% RCM, but now in march it wants to charge 12% GST, Whether it can take ITC of oct 2021 on vehicle Purchase?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

23 March 2022 Not a good Idea you will loose your customers in view of 12% GST.

Message likes : 1 times

CA SASHI KANT SHARMA

CA SASHI KANT SHARMA (Querist)

23 March 2022 sir whether the company can take itc of october 2021 month while filing march 2022 GST Return on vehicle purchased at the time when it was covered under 100% RCM, NOW In March it want to make forward charge willing to continue to take eligible ITC credit in future, whether it can do so?

Please sir suggest solution to the problem.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

24 March 2022 No ITC is allowed during 100% RCM period.

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