Goods and Transportation Agency(RCM), Goods and Services Tax - GST

[Ethirajan Parthasarathy]

A GTA from Mumbai, transports goods to Bengaluru, Karnataka. GTA in Mumbai is not registered. They do not raise any Invoice.

Their office in Bengaluru is registered unde GST and they raise Invoice indicating CGST and SGST. The Bangaluru branch has uploaded the invoice details and same is auto populated in GSTR 2A of the consignee.

The consignee pays only IGST as RCM Tax ignoring CGST and SGST reported by the Bangaluru office.

Please confirm what is done by the consignee is in accordance with law.

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

Yes. The action taken by the consignee is correct and he can avail ITC of tax paid under RCM.

[Alkesh Jani]

Sir,

In this regards, Section 10(1)(a) of the IGST Act, 2017 is reproduced below:-

"10. (1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,––

(a) where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient;"

As per the above provision, whether by supplier or recipient, if the goods are terminated at Bangaluru, the place of supply will be location of goods i.e. Bangaluru , so CGST and SGST is proper.

This is my point of view.

Thanks

[KASTURI SETHI]

I am convinced with the views of Sh.Alkesh Jani Ji.

[Ethirajan Parthasarathy]

In the given circumstances the GTA's office in Mumbai can be treated as a "fixed establishment" and location of the supplier becomes Maharashtra

I agree with the view of the Mr.Alkesh Jani, the place of supply will be treated as "Bangalore, Karnataka"

In the above circumstances, I feel only IGST is attracted. I request learned professional brothers to throw some more light on the above issue.

[Alkesh Jani]

Sir,

In this regards, please peruse the definition of “Fixed establishment” given at Section 2(50) of CGST Act, the ending line says ……..and use services for its own needs, therefore, the GTA having fixed establishment is for its own need for booking the goods, thus, has no relevancy with regards to supply of goods by the party, it can be illustrated as

M/s. X of Mumbai supplies the goods to M/s. Y in Bengaluru, the cost of transportation is to be borne by M/s. X. The M/s. T, is not registered under GST and is the booking office of M/s. GT, which is registered under GST at Bengaluru. The M/s. GT has fixed establishment for its own need for booking the goods, but supply is between M/s. X and M/s. Y. As per Section 15 of CGST Act, valuation of goods includes cost of transportation (assuming M/s. X agreed to pay ) as it is outward supply. Moreover, as per Section 10 of IGST Act, the place of supply is to be determined, as there is movement of goods, and are terminated at Bengaluru, the GTA will raise the Invoice with CGST and SGST, Cost along with tax is to be borne by the supplier of goods i.e. M/s. X.

No ITC is available, to M/s. X, as it is outward supply, also No ITC can be claimed by M/s. Y. (Refer Definition of Input Tax) as no tax is paid by M/s. Y.

This is my view, as per the query, Hope matter stands clear.

Thanks

[HariKishan Bhonagiri]

Whether Sec 10 of IGST Act applied for Services.To my view it applies only to goods. The subject matter of discussion is Goods Transport agency services. Hence Sec 12 may be relevant for discussion of POS rules.