RCM ON FREIGHT PAID FOR EXEMPTED PURCHASE

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This discussion clarifies the applicability of Reverse Charge Mechanism (RCM) on freight paid for exempted purchases, specifically concerning vegetable seeds. If the goods purchased, like vegetable seeds for growing purposes, fall under the exempted categories listed in Notification No. 12/2017-CT (Rate), then the freight paid for these purchases is generally exempt from RCM under GST. However, if the goods are not listed as exempt, RCM will apply to the freight charges.

satish kumar Chauhan

satish kumar Chauhan (Querist)
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27 December 2024 R/experts

I am a composition dealer, and trade in Vegetables seeds (GST exempted ) and General Goods. I pay the inward freight in regards of exempted purchase. I Read some where that RCM on freight paid for agriculture related supply/ purchase is exempted.

Kindly clear that freight paid in connection of Exempted purchase is RCM exempted ob such freight and also share any official notification number, press note any else.

Thanks

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 December 2024 According to Notification No. 12/2017-CT (Rate) dated June 28, 2017, certain agricultural products and other specified goods are exempt from GST when transported. If the goods fall under these categories, the freight may not attract RCM.
If the goods being transported do not fall into any exempt category listed in the notification, then the registered person must discharge GST under RCM on the freight charges incurred for those goods.

satish kumar Chauhan

satish kumar Chauhan (Querist)
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28 December 2024 Sir
First of all thanks for reply. Its mean that we are trading in Vegetable seeds for growing purpose. Freight paid against these purchase is exempt from RCM under GST.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 December 2024 Yes, if the seeds are under exempt category.

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