LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Goods transport agency to opt 5% forward charge

hawaldar queries (12 Points)

18 July 2018

I have received service from a Goods Transport Agency and they hav echarged 5% Forward charge in the invoice.

As per notification 20/2017 CGST ACT, it is defined that GTA opting for 5% forward charge cannot take ITC.

So with reference to the above notification, As I'm Service Receiver can I take Input Tax Credit of 5% gst paid to GTA.

Reply
Follow
Share

3 Replies

Satya N Dharani (Finance Professional) (491 Points)
Replied 18 July 2018

FYI pl

6% Provided that the goods transport agency opting to pay central tax @ 6% under this entry shall, thenceforth, be liable to pay central tax @ 6% on all the services of GTA supplied by it.”;

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 18 July 2018

No you cannot claim ITC , you have to do RCM ,... yes IF GTA charge 12 % in his invoice then recepient can take ITC

narendra (Accountant) (275 Points)
Replied 22 April 2019

Following is taken from CBIC's user guide. See 3rd page of the linked file:

https://www.cbic.gov.in/resources//htdocs-cbec/gst/goods_transport_service.pdf

"The liability to pay GST devolves on the recipients for supply of services by a goods transport agency (GTA) who has not paid central tax at the rate of 6% ^^, in respect of transportation of goods by road(in terms of notification no. 13/2017-Central Tax (Rate) dated 28.06.2017 (sr.no.1) as amended by notification no. 22/2017-Central Tax (Rate) dated 22.08.2017, if the recipients (located in the taxable territory) belong to the following category" .........(refer types of recipients defined in sec 9(3) of CGST Act)

From the above, it is clear that, if GST is NOT charges at 12% then, it is mandatory for the recipient** to pay GST under reverse charge. Therefore, a supplier (GTA) cannot levy GST at 5% under forward charge.

^^ - it means, 6% CGST + 6% SGST = Total 12% or 12% IGST.

** - recipient means recipient of transportation services who is liable to pay freight and falling in specified list section 9(3).

1 Like