A company engaged in business that is texfree and but registed with gst.
company have own vehicles, also want to start Transportation Services.
1.Is the company required to charge the service bill on transportation service with 12 percent Gst .
2.The company need not to charge gst, the receipent will pay the tax under RCM.
which is the correct option.
Menu
Gst on Transportation under RCM
Replies (2)
IF the supply made by company is exempted from levy of GST, then neither company nor recipient is required to pay GST on transportation services irrespective of forward charge or reverse charge.
However, if the company is engaged in supply of taxable goods or services, then supplier is required to either pay tax at 12% and avail the ITC or pay tax at 5% without availing any ITC on inward supplies.
If the supplier of transportation services has opted to pay tax under 12%, then recipient is no longer required to pay tax on reverse basis on inward transportation services. But if the supplier is paying tax at 5% then recipient is also required to pay tax at 5% on reverse charge basis.
However, if the company is engaged in supply of taxable goods or services, then supplier is required to either pay tax at 12% and avail the ITC or pay tax at 5% without availing any ITC on inward supplies.
If the supplier of transportation services has opted to pay tax under 12%, then recipient is no longer required to pay tax on reverse basis on inward transportation services. But if the supplier is paying tax at 5% then recipient is also required to pay tax at 5% on reverse charge basis.
Extract of rate notification
[(iii) Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use). Explanation.- ―goods transport agency‖ means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)] or 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.]
Extract of RCM notification
In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government on the recommendations of the Council hereby notifies that on categories of supply of services mentioned in column (2) of the Table below, supplied by a person as specified in column (3) of the said Table, the whole of central tax leviable under section 9 of the said Central Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of the such services as specified in column (4) of the said Table:-
Therefore only either supplier or receiver is liable to pay tax.
Recent Threads
- Pagdi Room Deposit can be taken as Initial Payment
- Capital gain on Property trf through DanPatra
- Schedule SI is not showing correct tax calculation
- ITR2 AY25-26 new taxregime for salaried employee
- Error mesage in ITR3
- Gst in Turnover
- GST Tax invoice Govt.agency
- CAN ICAI EXAMINER'S REMUNERATION BE TAXED U/S 44AD
- Applicability of IGST or CGST/SGST
- Form 26AS Glitch
Related Threads
CAclubindia
