GST on GTA services with tax charged on bill

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proprietor
249 Points Joined April 2014

A GTA has charged GST @ 5% on the bill. But he has also mentioned in the bill that GST is payable on RCM basis.

I believe RCM is not applicable as the GTA has charged tax on forward charge basis @ 5%.

Please suggest.

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On 19 September 2024 at 14:36 Report
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Master in Accounts & high court Advocate
8875 Points Joined December 2011

You're right to question this, as RCM (Reverse Charge Mechanism) and forward charge basis are two different things ¹. RCM is a mechanism where the recipient of goods or services is liable to pay GST instead of the supplier, whereas forward charge basis means the supplier pays the tax ¹. In your case, since the GTA has charged GST @ 5% on the bill, it means they are paying the tax on a forward charge basis ¹. The mention of RCM in the bill seems to be an error, as RCM is not applicable here. However, it's always best to clarify with the GTA directly to avoid any confusion. You can ask them to confirm whether they intended to charge tax on a forward charge basis or RCM basis. This will help prevent any potential disputes or issues in the future.

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On 19 September 2024 at 19:22
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Master in Accounts & high court Advocate
8875 Points Joined December 2011

You're right to question this, as RCM (Reverse Charge Mechanism) and forward charge basis are two different things ¹. RCM is a mechanism where the recipient of goods or services is liable to pay GST instead of the supplier, whereas forward charge basis means the supplier pays the tax ¹. In your case, since the GTA has charged GST @ 5% on the bill, it means they are paying the tax on a forward charge basis ¹. The mention of RCM in the bill seems to be an error, as RCM is not applicable here. However, it's always best to clarify with the GTA directly to avoid any confusion. You can ask them to confirm whether they intended to charge tax on a forward charge basis or RCM basis. This will help prevent any potential disputes or issues in the future.

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On 19 September 2024 at 19:22


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