RCM applicability on petty GTA freight (₹450) and ITC eligibility

Dear Experts,

Need practical guidance on a GTA reverse charge query:

 * Situation: We (GST registered) bought construction materials from another state. Road freight of ₹450 was paid directly in cash to the transporter (GST registered).

 * Issue: The transporter didn't upload the invoice, so it does not appear in our GSTR-2B.

Questions:

 * Post the withdrawal of the ₹750 threshold (Notification 04/2022-CT(R)), are we legally required to self-invoice and pay 5% RCM on this nominal amount in GSTR-3B?

 * If RCM is paid, can we claim ITC, or is it blocked under Section 17(5)(d) if the construction materials are capitalized to immovable property?

 * How is such nominal petty-cash freight handled during department audits?

Looking forward to your guidance.

 

Replies (2)
Quick Summary
This discussion clarifies that following the withdrawal of the ₹750 exemption, Goods Transport Agency (GTA) services, even for a nominal ₹450 cash freight, are subject to Reverse Charge Mechanism (RCM) and must be paid in GSTR-3B. While RCM is payable, the Input Tax Credit (ITC) for freight related to capitalised construction materials is blocked under Section 17(5)(d) and should be declared as ineligible. It is advised to consistently tag and declare such petty cash freight under RCM to avoid audit issues.

Under current GST laws, the ₹750 exemption threshold for GTA services stands withdrawn, meaning RCM at 5% must be paid in Table 3.1(d) of GSTR-3B even on a nominal cash freight of ₹450. Because the freight cost relates to construction materials capitalized to immovable property, the corresponding ITC is blocked under Section 17(5)(d) and must be disclosed as ineligible credit. To avoid interest and audit reconciliation discrepancies, all petty-cash freight vouchers should be consistently tagged and declared under RCM.

Thank you Sir for your guidance. 

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