RCM on GTA Payment

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This discussion clarifies GST liability under the Reverse Charge Mechanism (RCM) for GTA services when a registered firm (RBC) despatches goods to an unregistered person (XYZ) on a 'to-pay' basis. It confirms that RBC is not liable for GST under RCM because the unregistered recipient (XYZ) is not a notified person for RCM on GTA services. Since XYZ pays the freight, it's considered a B2C supply of GTA, which is exempt. The conversation also touches upon the issuance of payment vouchers for RCM payments and their inclusion in GSTR-1.

M L SHARMA

M L SHARMA (Querist)
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28 July 2025 RBC (Registered Firm) despatched goods through a Regd. GTA, to XYZ (Unregistered Person) on `To-Pay' basis.

Freight is payable by XYZ(Unregistered Person).

In this case, is RBC liable to pay gst under rcm, since not making payment of freight?

Thanks...

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 July 2025 RBC, as a Registered Firm, is not liable to pay GST under Reverse Charge Mechanism (RCM) for GTA services in this case.
RBC is not required to pay GST under RCM on the transaction described, since the person paying the freight (XYZ) is not covered in the notified categories of persons liable for RCM on GTA services. If XYZ were a registered entity, then RCM liability might arise for them, not RBC.

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CA ASHOK DAHIYA

CA ASHOK DAHIYA (Expert)
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30 July 2025 In this case since freight will be paid by XYZ therefore GTA will issue MR to XYZ and it will be B2C Supply of GTA which is exempt under Notification No. 12/2017. therefore XYZ being an unregistered person needs not to pay GST under RCM. and further GTA will issue Bill of Supply in this case.

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M L SHARMA

M L SHARMA (Querist)
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06 August 2025 Thank you sir!
One more qustion regading Payment Voucher needs to be issued in case of GTA Payment under RCM.
Question is can we issue such Payment Voucher in next month's GSTR-1? Since, in some cases, information of such payments is miscommunicated within organisation at their different department level, and also no info is available in IMS till that day, even some GTA who are Quarterly Filler delays it more.
Thanks for your help sir.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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08 August 2025 Yes, eligible.

M L SHARMA

M L SHARMA (Querist)
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12 August 2025 Once Again Thank You Sir!

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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13 August 2025 You are welcome.

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