RCM applicable on rice husk shifting contractor, Goods and Services Tax - GST

[KARAN VERMA]

Sir

We have made contract with ABC co. for shifting of rice husk from our godown to factory yard which include labour of contractor for loading, unloading and transportation charges (truck of contractor).

My question whether RCM applicable on invoice raised by rice husk contractor ?

Posts / Replies

[TANAY GHILDIYAL]

Under GST laws, the definition of Goods Transport Agency is provided in clause (ze) of notification no.12/2017-Central Tax (Rate) dated 28.06.2017. (ze) “goods transport agency” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called; Thus, it can be seen that issuance of a consignment note is the sine-qua-non for a supplier of service to be considered as a Goods Transport Agency. If such a consignment note is not issued by the transporter, the service provider will not come within the ambit of goods transport agency. If a consignment note is issued, it indicates that the lien on the goods has been transferred (to the transporter) and the transporter becomes responsible for the goods till its safe delivery to the consignee. It is only the services of such GTA, who assumes agency functions, that is being brought into the GST net. Individual truck/tempo operators who do not issue any consignment note are not covered within the meaning of the term GTA. As a corollary, the services provided by such individual transporters who do not issue a consignment note will be covered by the entry at s.no.18 of notification no.12/2017-Central Tax (Rate), which is exempt from GST.

Consignment Note is neither defined in the Act nor in the notification no.12/2017-Central Tax (Rate). Guidance can be taken from the meaning ascribed to the term under the Explanation to Rule 4B of Service Tax Rules, 1994. In terms of the said rule, consignment note means a document, issued by a goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency.

Opinion:- In ur case the consignor and the consignee seems to be the same person so issuance of consignment note doesn't comes to question. Hence applicability of GST under RCM will not be applicable in ur case.

For any further clarification feel free to contact - Tanay Ghildiyal 9873938771

[KASTURI SETHI]

Truck owner is GTO (Goods Transport Operator) and not GTA. Only GTA is under RCM. Only GTA Services are liable to GST.

[KARAN VERMA]

Thanks to all.

[Rajagopalan Ranganathan]

Sir,

Truck owner is liable to discharge gst only if his turnover in the previous financial year exceeds ₹ 20 lakhs.

[Ganeshan Kalyani]

I agree with the views of Sri Kasturi Sir and Sri Rajagopalan Sir.

[KASTURI SETHI]

In GST, for computation of threshold exemption limit the term 'preceding year' is not relevant. It was in pre-GST era. It is 'a financial year' for this purpose now.

Further auxiliary charges i.e. loading, unloading etc. are taxable under the category of GTA and not under GTO.