Reverse Charge on transport

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This discussion clarifies the application of GST reverse charge (RCM) on transport services. RCM is generally applicable when paying freight to a Goods Transport Agency (GTA), even if the service isn't explicitly reflected on GST returns. If the transport is not through a GTA, RCM typically does not apply. It's advisable to pay RCM on GTA services to avoid future disputes, and the cash paid can be recorded as transport expenses.

pooja

pooja (Querist)

17 May 2024 Dear All

I am paying freight in cash to transpoters. Some bills are reflecting under GST for which I am liable to pay reverse charge but others it is not showing. Do I have to pay reverse charge on that also and claim the input credit for that or i need not to consider the amount which is not in GST.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

17 May 2024 RCM applicable only in case transport through GTA.
You need not pay reverse charge for other transport not reflecting GST.

CA Puja Sharma

CA Puja Sharma (Expert)

17 May 2024 If the bills which are not reflecting in GSTR 1 also pertains to GTA then RCM will apply on these bills also.

You will be recording the cash paid as transport expenses in your books of accounts.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

17 May 2024 Yes, RCM applicable in such a case of GTA.
Yes, record it as transport expenses no problem.

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)

18 May 2024 RCM is applicable on GTA Services subject to transporter issues Consignment Note that is that Law Says, but to avoid any litigation in future you can Pay RCM and get away with it

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