RCM ON FREIGHT OF ORGANIC MANURE (RELEVANT SECTION)

Under the Goods and Services Tax (GST) framework, the transportation of organic manure is specifically exempt from GST.

Key Points:

• Exemption from GST: Services provided by a Goods Transport Agency (GTA) by way of transportation of organic manure are exempt from GST under Notification No. 12/2017 – Central Tax (Rate).

• No RCM Applicability: Since the service itself is exempt from GST, the Reverse Charge Mechanism (RCM) does not apply. RCM is only applicable on taxable services where the tax liability is shifted to the recipient; if the underlying service (transportation of organic manure) is exempt, there is no GST to pay or discharge under RCM.

• GTA Requirements: It is important to note that this exemption applies to the service of transportation. To qualify as a GTA service, the transporter typically issues a consignment note. If no consignment note is issued, the transporter does not meet the definition of a GTA, and the service remains outside the scope of GST, which further reinforces that no RCM is applicable.

Summary

The transportation of organic manure is an exempt service under GST laws. Because the service is exempt, there is no requirement to pay GST under the Reverse Charge Mechanism (RCM).