freight reverse charge

Nahi, aapko tax pay karne ki jaroorat nahi hai

Dear Ankit

As per Notfn.13/2017 - CT (R) Dtd 28.06.2017 as amended by Notfn. No.22/2017 - CT (R) Dtd. 22.08.2017, if the following conditions are satified, then the recipient of GTA service becomes liable to pay tax under Reverse Charge Mechanism (RCM):

1. The service availed is a GTA service.
2. The GTA has NOT opted to pay tax @ 12%(CGST @ 6% +SGST @ 6%)
3. The service recipient is a specified registered person as per the above notification.

So, as per my understanding, assuming you fall into the category of speciifed registerd service recipient, you are liable to pay tax under RCM @ 5%. You can refuse to pay to the GTA the tax component charged on their invoice.Even if the GTA has collected tax erroneously on their invoice, being a specified service recipient, your liablity to pay tax under RCM remains as per Sec.9(3) of CGST Act, 2017.

However, if you are not a dealer who has opted to pay your output tax under Composition Scheme, you can take input tax credit for the amount of tax so paid @ 5%. For this, first you have to pay the tax under RCM in cash and then next month you will get credit for the same to be adjusted agaist your output tax liability of that month.

I know it sounds a little complicated. Please consult a CA for detailed opinion.

Regards

Ajay

Dear Ankitji,

Mein Ajayji ki baat se puri tarah se sahmat hoon so far the content of the notification mentioned by his is  concerned.

But, the following points also required to be taken into account :

Section 2(98)  defines  “reverse charge”  as the liability to pay tax by the recipient of supply of goods orservices or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or sub-section (4) of section 5 of
the Integrated Goods and Services Tax Act;

The words used "instead of Supplier" in above definition do not leave any room for applicability of Reverse Charge in case of GST is already paid by the Supplier of Goods or Service.  

As per Section 9 (3) also, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. 

As per this provision also Govt is not empowered to issue a notification which ask for the payment of RCM where GST liability has already been discharged by the GTA service provider.

The provisions of notifications are unauthorised and ulrta vires. 

I am, thus, still of the opinion that NO RCM is payable by you.

Kya ek Registred Dealer ok Fright ka RCM Jama Karane ka jarurat hai jabki govt ne 30 june 2018 tak RCM ko withdraw kar liya hai Jabki Bilty value Rs 5000 se kum ya jyada hai ?