Transport Transaction

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This discussion clarifies GST implications for transport transactions, specifically when a transporter issues a bill without adding ITC. It explains that if the transporter is a Goods Transport Agency (GTA) and issues a consignment note (like an L/R or T/R), GST must be paid under Reverse Charge Mechanism (RCM) at 5%. This GST payment is treated as an expense, reducing profit, as input tax credit is not allowed for it.

TARIQUE RIZVI

TARIQUE RIZVI (Querist)
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07 February 2020 Respected Sir,

On 25-01-20 transporter has given me a bill on account of freight as upon which no ITC was added. In our books of accounts we will debit freight charges and will credit to transport company. People say ITC @ 5% shall have to be paid in cash on account of the billed amount. What kind of entry shall be passed in our books of accounts on account of the paid ITC. Please guide me and oblige. The entry will be the part profit & loss account or will be the part of balance sheet. tks & rgds

CA Anita Bhadra

CA Anita Bhadra (Expert)
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07 February 2020 If your transporter is GTA,( He has issued consignment note ) you need to pay GST on RCM @ 5% without ITC

GST paid for which input tax credit is not allowed, should be booked as the expense and thus reducing the profit.

TARIQUE RIZVI

TARIQUE RIZVI (Querist)
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07 February 2020 RESPECTED ANITA JI
RGDS & THANKS TO YOU

GTA MEANS WHAT ?

CA Anita Bhadra

CA Anita Bhadra (Expert)
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07 February 2020 Goods Transport Agency
“Goods Transport Agency” means any person who provides service in relation to transport of goods by road and issues consignment note,

TARIQUE RIZVI

TARIQUE RIZVI (Querist)
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07 February 2020 THANKS FOR YR GUIDELINE

TARIQUE RIZVI

TARIQUE RIZVI (Querist)
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08 February 2020 Anita Madam
Rgds to you

Here consignment note means L/R or T/R or R/R
Lorry Receipt
Truck Receipt
Railway Receipt

Am I right ?

tks & rgds

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