5 percent to gta under forward charge

our gta is raising invoice at 5 percent under forward charge. we are paying 5 percent and claiming itc.
what is the consequences if receipent pays gst in 5 percent to gta directly instead of rcm and takes credit
Replies (5)
Quick Summary
This discussion explores the implications of a Goods Transport Agency (GTA) invoicing at 5% GST under the forward charge mechanism. Participants are debating the consequences if the recipient pays this 5% directly and claims Input Tax Credit (ITC), rather than opting for Reverse Charge Mechanism (RCM) where applicable. The consensus leans towards potential issues during audits, with the department possibly demanding the differential GST and interest if RCM was mandatory.

As per my knowledge,

as per Notification No.13/2017-CT Rate, any person registered under GST  has to pay GST under RCM @ 5%, if the GTA has not given Tax Invoice with GST 12%.

If not paid, further at the time of audit, department may insist to pay GST under RCM @ 5%, and further availing Input of the same may be in trouble.

In case of forward charge you need to charge 12% GST. Department will issue notice and may asked for paying balance 7% later on with interest

RCM is not applicable when transporter mentioning that supply is under forward charge. It is the non compliance of the transporter that he is charging less GST 

To clear my doubt, discussing here,

Services which has been prescribed in Notification No.13/2017-Central Tax Rate are as per Section 9(3) of GST act, on which GST has to be paid compulsorily under RCM by the Recipient.

And as per Sl. No.1, of above said notification every registered dealer has to be paid GST under RCM if GTA not submitted Tax Invoice with GST @ 12%.

And as per Sl. No.9(iii) of Notification No.11/2017- Central Tax Rate, GTA who is not availing input Credit can submit Invoice with 5% and who is availing ITC can submit invoice with 12%.

As per above GTA can issue Invoice with GST either 5% or 12% as per his Input Credit. In the scenario how come GTA will liable to pay balance 7% GST.

The customer can take the credit of 5% GST paid on GTA invoice under forward charge

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