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RCM for freight charges

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Shankar Sharma

405 Points Posted on 08 February 2020

We despatch materials by lorry transport and we pay freight charges. Transporter having gst registration, issues only an Lorry receipt ( L/R) and does not collect any gst. Freight amount will be around Rs. 1000/-. Should we pay gst under RCM and claim ITC, if so at what percentage?

Replies (4)

Quick Summary

This discussion clarifies the Goods and Services Tax (GST) implications for freight charges paid to transporters issuing only Lorry Receipts (LRs). It addresses whether GST is payable under Reverse Charge Mechanism (RCM) and how to claim Input Tax Credit (ITC). The consensus is that GST at 5% (2.5% CGST and 2.5% SGST) is applicable under RCM, with specific exemptions for amounts up to Rs. 750 or Rs. 1500 for single consignments. ITC can be claimed in the same return period as the RCM payment.

RAJA P M

"Do the Right Thing...!!!"

77833 Points Posted on 08 February 2020

Rate of Tax @ 5%

Shankar Sharma

405 Points Posted on 08 February 2020

Thank you Mr. Raja, isn't there some limit, below which one need not pay gst under RCM? And this 5% is it to be shown as sgst and cgst 2.5% each?

RAJA P M

"Do the Right Thing...!!!"

77833 Points Posted on 08 February 2020

Yes... We have Some limits of GST Tax under rcm basis to GTA....

Upto Rs 750 is exempted for paying GST Tax under rcm basis...

Upto Rs 1500 is exempted if transportation is single consignment...

Yes... CGST @ 2.5% & SGST @ 2.5%