if one gta making Subcontract of supply a goods and finally rcm done by the actual service receiver ie consumer
so is their any liability of rcm on GTA who makes this subcontractor ??
note :- both gta are registered under gst
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Gta to gta rcm
Replies (1)
| This is a common query in the logistics industry. Here is the GST position: 1. RCM on GTA Services (Notification 13/2017-CT Rate): RCM applies when a SPECIFIED CATEGORY of recipient receives GTA service. The specified recipients who must pay under RCM are: factory, society, cooperative, registered person, body corporate, partnership firm, casual taxable person — NOT another GTA in its capacity as a GTA. 2. GTA Hiring Another GTA: - If GTA-A hires GTA-B for part of the transportation route: GTA-A is the recipient of GTA-B's service - GTA-A is a registered person — hence, RCM applies. GTA-A must pay GST under RCM on the freight paid to GTA-B - Rate under RCM: 5% IGST/CGST+SGST (no ITC available to GTA-A on this RCM payment if GTA-A has opted for 5% forward charge without ITC) 3. If GTA-B is Unregistered: RCM still applies — the recipient (GTA-A) pays the tax regardless of whether the supplier (GTA-B) is registered or not 4. ITC on RCM Paid by GTA-A: - If GTA-A has opted for 12% GST with ITC under forward charge: GTA-A can claim ITC of the RCM tax paid to GTA-B - If GTA-A has opted for 5% without ITC: No ITC available on RCM paid either 5. Recent Development (Budget 2023): GTAs were given the option to pay GST under forward charge. If GTA-B opts for forward charge and charges 5%/12% GST on invoice to GTA-A, then RCM does not apply — GTA-B collects and pays the GST forward 6. Practical Advice: Clarify with GTA-B whether they have opted for forward charge. Get a declaration from them — this determines whether you pay RCM or they collect forward charge GST |
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