WHO WILL LIABLE TO PAY TAX ON FREIGHT CHARGES UNDER RCM ?

This query is : Resolved

phanikumar (Querist)
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31 January 2022 Sir,

Delhi Interstate Supplier has supplied goods on "Door Delivery" basis through GTA Transporter (Freight on 'TO-PAY' basis) and generated e-waybill as well as Invoice both Billed to and Shipped to in favour of 'A' Party at Vijayawada Godown (Andhra Pradesh State), but 'A' Party managed GTA transporter to deliver the goods to his dealer at Kakinada (Andhra Pradesh State) under cover of his ('A' Party) Invoice and e-Waybiil from Vijayawada (Andhra Pradesh State) to Kakinada (Andhra Pradesh State) in the same Vehicle and Transport.

Kakinada Party will pay Freight Charges directly to GTA Transporter as per agreement between 'A' Party and Kakinada Party and 'A' Party does not bear Freight Charges. Delhi Supplier is unaware of the said transaction.

My doubt is that whether Tax under RCM is liable to pay by Kakinada Party or 'A' Party is liable to pay as the Interstate Dealer has generated Ewaybiil / Invoice and L/R is up to Vijayawada (Andhra Pradesh State) destination in favour of 'A' Party.

Please clarify my doubt Sir

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 February 2022 Tax under RCM is liable to pay by Kakinada Party who paid freight to GTA.

R. B. Yadav (CMA, LLB)

R. B. Yadav (CMA, LLB) (Expert)
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02 February 2022 On GTA services, both the option i.e. forward charges as well as reverse charge option is available to pay the GST. Once an option is opted, its can't be changed during the financial year. Hence, in your case, if GTA vendor have not opted to pay GST under forward charges, it is the liability of recipient to discharge the GST liability under RCM.

As per section 2(93), the person who is liable to pay the consideration to supplier is the recipient. Therefore, Kakinada party is liable to discharges the GST liability under RCM

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