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TMI BlogFCM & RCM in Transport BusinessX X X X Extracts X X X X X X X X Extracts X X X X ..... FCM & RCM in Transport Business X X X X Extracts X X X X X X X X Extracts X X X X ..... issue where situation calls for interpretation. . We are not supposed to explain the whole law. Reply By Karthik Manoharan: The Reply: Sir, If i am doing FCM and giving 12% additional in one company & other company giving RCM only my freight can i do both Kindly do the needful. With Regards, Karthik M Reply By Himansu Sekhar: The Reply: You do not have the obligation of FCM, when the recipient of the GTA service is a company. Even if you charge and pay, the liability of the recipient will not vanish. Reply By Himansu Sekhar: The Reply: Consulting a consultant is an option before paying GST Reply By YAGAY ANDSUN: The Reply: To all experts, Please do not demoralize any person/query seekers that this is not the forum to raise s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch question. In our view even silly questions need smart answer. If we could not understand the question, then we may ask it again and then accordingly revert. Reply By KASTURI SETHI: The Reply: There is a logical force in the request of M/s.YAGAY and SUN. So it is worth to be followed by us. Reply By YAGAY and SUN: The Reply: Thank you, Kasturi Sir. Reply By Sanjay Aggarwal: The Reply: If a GTA opts for paying tax under FCM, the GTA has to charge GST under FCM on all the GTA services provided by it. Hence, a GTA cannot raise invoice to one customer in FCM and to another in RCM Reply By Prakriti Mish: The Reply: MR. Sanjay agarwal, can you provide any link where it is written that hybrid procedure is not allowed. Reply By KAST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... URI SETHI: The Reply: Decision taken in 20th meeting of GST Council on 5.8.2017 8. Goods Transport Agency Service (GTA) Allowed option of 12% GST with full ITC under forward charge. 5% GST with no ITC will also continue. (However, the GTA has to give an option at the beginning of financial year As per the above decision, in case GTA intends to supply service under FCM, that person has to give an option at the beginning of financial year. It makes it clear that GTA has to either supply service under FCM or RCM. Filing of option itself means GTA has to choose one out of two ; either FCM or RCM. After filing option, GTA is legally bound not to follow one mechanism. There is no doubt at all. Reply By Siva Rama: The Reply: Dear Tax Manage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Experts, GTA were not at all needed to take GST registration, if they provide service only to specified category of Service receivers. These specified categories of service receivers will directly deposit GST to Government on RCM basis. This specified category of persons include GST registered person also. So if GTA provides service to unregistered person (URD), GTA were liable to take registration. So GTAs instead of they taking GST registration, started insisting/forcing all URD to take registration even though URDs are not liable to take. Otherwise they won't give service to URD. So Govt interfered in this matter and exempted the service of GTA, if GTA is providing service to an URD.(Notification 32/2017 Central tax rates) Now GT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A has two rates option GTA service provider opts for 12% ITC fully available for service provider No RCM headache for any service receiver (Actually the term any service receiever will never come because there is no GST if GTA provides service to other than specified category of person. Notf 32/2017. So by this, the bolded sentence will become "No RCM headache for specified category of Service receiver") ITC 12% is available for Service receiver GTA service provider opts for 5% No ITC available for service provider RCM headache is there for specified category of Service receiver. ITC 5% is available to service receiver. Doubt No 1 I have a doubt. why a GTA would opt for huge 12% GST? I am not at able to think a scenario why a GTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will opt for huge 12% instead of 5%(5% will be always paid through RCM by service receiver. He even need not take GST registration for this). What will be the input credit available to him? What is the major input service available to him? The business of GTA will be in an office premise and with accountants or clerks booking and acting as intermediary between transporters (eg truck Owner) and product supplier (eg a manufacturer supplying goods) GTA is never owner of any transport. So he has no repair expense or capital goods like tyre purchase for taking credit. Maximum credit will be from administrative expense like telephone, broadband internet some petty things. I don't know what is the reason for Govt fixing these two rates 12% (w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith full ITC) and 5% (with no ITC)? Doubt No2 Why many GTA who opted for 5% has not yet cancelled the registration? OK. If GTA has not yet cancelled the registration, they are supposed to raise GST invoice and in that they has to mention as yes for Question whether RCM applicable. But in one of my client, where there are many inward supplies from GTA, none of these GTA's bill is in GSTR-2A with RCM yes. What and why is this happening in GTA industry.? Regards, Siva Reply By CHETAN PRAJAPATI: The Reply: If a Transporter, who has opted option as FCM and charged gst @ 12%, can out from option of FCM and take option of RCM as liability of payment of GST will arise to service receiver? Reply By KASTURI SETHI: The Reply: GTA can opt out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of FCM in a new Financial Year that is 1st April for RCM scheme. Reply By Siva Rama: The Reply: Notification no 12/2017 CTR gives exemption for service provided by GTA, by way of transport in goods carriage of - (b) goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees (c) goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty ; GST payable on GTA service on Forward Mechanism Basis Example for (b) In a goods carriage, consignor A booked for consignee B Freight ₹ 600, consignor C booked for consignee D Freight ₹ 400 cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ignor E booked for consignee F Freight ₹ 600 Aggregate Amount (600+400+600)= Rs 1600 Answer GST payable by GTA (Forward mechanism) Reason Consideration charged in a single carriage exceeded ₹ 1500 Example for (c) In a goods carriage Consignor A booked for consignee Z Freight ₹ 600, Consignor B booked for consignee Z Freight ₹ 200, Aggregate Amount (600+200)= ₹ 800 Answer GST payable by GTA (Forward mechanism) Reason Consideration charged for transportation of all such goods for a single consignee exceeded ₹ 750 Finding out aggregate amount as mentioned above (Rs 1600 and ₹ 800) is possible only from the point of view of GTA on Forward charge mechanism basis, because this data is avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable only with GTA, not in the hand of consignor/consignee who is the receiver of service. GST payable on GTA service on RCM basis If the service receiver (take consignor A of eg above) is liable to pay GST on RCM basis, then in Case (b) Consignor A does not know how many other consignments are going in the truck in which his goods have been loaded. Due to non availability of such information, he has to pay on safer side, GST on RCM even though his bill (Rs 600) is below ₹ 1500. Case (c) Consignor A does not know whether any other consignors are sending goods to the same consignee (Z) in the truck in which he has loaded his goods. Due to non availability of such information, he has to pay on safer side, GST on RCM even thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h his bill (Rs 600) is below ₹ 750. My view poinnt According to me this limit of ₹ 750/1500 have some sense only when we think from the view point of GTA who pays on FCM basis and not from the point of Service receiver who pays on RCM basis. Then In such case every person whoever is paying freight charge to a GTA (even though it is Re1) has to take GST registration (Compulsory registration section 24 CGST) if they are liable to pay for GST on RCM basis due to non-availability of information as I quoted above. If what I have written above is totally wrong, experts please correct me. Reply By mohan sehgal: The Reply: Please resolve the ISSUE for Service Reciever; This limit of ₹ 750/- for a single cosignment.....wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er he should deposit GST under RCM or he is Exempted. A consignment is sent to a consignee on Freight Paid basis and the GTA issues a consignment Note(G.R.) for ₹ 650/-only...Whether the Consignor should deposit GST under RCM basis or he is exempted under the ₹ 750/-Limit. Thanks. Reply By Siva Rama: The Reply: Respected Mohan sehgal sir, I am also confused on the same question. I feel GST RCM has to be paid in your case. Expert views awaited Reply By KASTURI SETHI: The Reply: The limit of ₹ 750/- of all such goods is for a single consignee and not for a single consignment. In a truck goods may be loaded of so many consignees but for the purpose of exemption, consideration for a single consignee should not exceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 750/-. Emphasis is on the words, "a single consignee" . Reply By KASTURI SETHI: The Reply: Dear Sir (Sh.Sehgal Ji),. In my view, it is exempted. It is not the intention of Govt.to tax below the limit of ₹ 750/- . Reply By mohan sehgal: The Reply: Thanks.... If the consignment note is more than ₹ 750/-....the service receiver has to deposit 5% GST under RCM.. Now.,what would be the place of supply if the material is despatched inter-state....To be more precise...The consignor .sends goods to its buyer(consignee)inter-state on Freight Paid basis..The GTA issues a Consignment note(G.R.) for ₹ 1200/- and collect the amount from the consignor...Now,the Consignor has to deposit GST under RCM on ₹ 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/-....It should be deposited under CGST/SGST or IGST....The consignment is inter state but the Freight has been paid at the location of the consignor. What should be the place for supply for GST paid under RCM(for GTA Services).?? In other words; the place of supply is the location of consignor or the location of the consignee ?? Reply By KASTURI SETHI: The Reply: The place of supply is the location of consignor as it is covered under Section 12(8)(a) of the IGST Act, 2017 In terms of Section 12(8) of the IGST Act, 2017, the place of supply of services by way of transportation of goods, including by mail or courier to - (a) a registered person, shall be the location of such person; (b) a person other than a registered person, sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be the location at which such goods are handed over for their transportation.
GTA has provided service to a registered person (Consignor). X X X X Extracts X X X X X X X X Extracts X X X X
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