ITC UNDER REVERSE CHARGE MECHANISM FOR COURIER AGENT

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PROFESSIONAL ADEPT (Querist)
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16 April 2024 Sir,

We are having an agency of Trackon Courier and we receive an invoice from Trackon courier at the end of the month stating the transaction for the particular month as billing to us etc, we need to know whether we need to show the full amount as sales as RCM or need to show in GSTR-3b only as inward supplies liable to reverse charge. Please let us know...

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 For transactions where you receive services from Trackon Courier and are liable to pay GST under the reverse charge mechanism (RCM), here’s how you should handle it in your GST returns:

### Understanding Reverse Charge Mechanism (RCM):

1. **Nature of Transaction**: When you receive services from Trackon Courier, if they fall under the specified categories for RCM, you as the recipient of the service are liable to pay GST directly to the government instead of Trackon Courier paying it.

2. **Inward Supplies under RCM**: In your GSTR-3B return, you should report these transactions under the section for "Inward supplies liable to reverse charge" (Table 3.1(d)).

3. **No Need to Show as Sales**: Since you are not selling these services but receiving them, you do not need to show the full amount as sales. Instead, you are recording the liability to pay GST under RCM.

### Steps to Report in GSTR-3B:

- **Table 3.1(d)**: Enter the total invoice value received from Trackon Courier in the relevant month under "Inward supplies liable to reverse charge."

- **Tax Calculation**: Calculate the GST amount payable based on the applicable rate (CGST + SGST/UTGST or IGST, depending on your location and the nature of services).

- **ITC**: You can also claim Input Tax Credit (ITC) on the GST paid under RCM, subject to the conditions and restrictions of GST law.

### Example Scenario:

If Trackon Courier provides courier services to you and the service falls under RCM, let’s say the invoice amount is Rs. 10,000 + GST (18% IGST).

- You will report Rs. 10,000 in Table 3.1(d) of your GSTR-3B as "Inward supplies liable to reverse charge."
- Calculate and pay IGST of Rs. 1,800 (18% of Rs. 10,000) directly to the government.

### Conclusion:

You do not need to show the full amount as sales in your GSTR-3B. Instead, report the transaction correctly under the section for "Inward supplies liable to reverse charge" and pay the GST under RCM. Ensure compliance by accurately reporting and paying GST as per the guidelines to avoid penalties or interest. If you have any doubts or specific details about the services provided by Trackon Courier and their GST implications, consulting a GST professional would be advisable for precise guidance tailored to your business needs.