RMC ON FRIGHT, Goods and Services Tax - GST

[Shailander Jain]

One of our client is Cement Dealer and charging tax under forward charges on cement sale @ 28%. Now cement company appointed him as C&F Agent and paying secondary freight for Transportation of Cement bag from Depo to Sub dealer/customer location.

My query is : Can dealer raise secondary freight invoice to Cement company under REVERSE Charges mechanism with the object that GST on freight will be paid by cement company.

Posts / Replies

[KASTURI SETHI]

Sh. Shailander Jain Ji,

(1) A C & F Agent is a pure agent in terms of Rule 33 of CGST Rules, 2017. See Explanation below sub-clause (iii). The pure agent is responsible for payment GST on the amount of commission.

(2) A C & F Agent works for and on behalf of the Principal (owner). So the Principal is liable for discharging GST liabilities.

(3) A person who pays (bears) the freight can pay GST on the amount of freight under RCM.

(4) Thus the Cement Company, being the Principal can pay GST on the amount of secondary freight.

[Shilpi Jain]

Reverse charge applicable only for GTA i.e. a person transporting the goods and issuing a consignment note.

Pls see if these are satisfied.

[KASTURI SETHI]

        If GTA does not opt for forward  charge mechanism, person paying freight to GTA is liable to pay GST under RCM and that person may be consignor or consignee (registered) . 

          All the above three replies should be  read conjointly.