Taxability of gta under gst (gst reverse charge mechanism in gta)
According to Section 9(4) of CGST Act, if the Supplier is Unregistered and Recipient is registered then such registered recipient will pay the tax under reverse charge. This Section is suspended from 13th Oct’ 2017 till 30th Sep’ 2019 by following Notifications of Central Tax Rate 38/2017, 10/2018, 12/2018, 22/2018
Although goods or services specified in section 9 (3) of CGST Act is received from unregistered dealer, then reverse charge will be applicable.
Transport Services fall in two categories
Transporters who does not issue the consignment note (Bilty/Lorry Receipt etc.).
(Such transporters of goods by Road (Like Tempo, Auto etc) will be exempt as per notification 12/2017
Goods Transport Agency (GTA) who issues the consignment note.
As per notification 13/2017, GTA service shall be in reverse charge if the recipient is in taxable territory and is in any from i.e. “Factory, Society, Co-operative Society, Registered person in GST, Body Corporate, Partnership Firm, and Casual Taxable Person”
GTA Service is an Exempt Service for Specified Purpose/Goods as followed:
1. Agriculture produce, milk, salt, rice, food grains
2. Where transportation charge is less than 1500
Further important point is to note that from 22nd August 2017 vide notification 22/2017, if GTA charges 12% GST, then there would not be any reverse charge
Other-wise GST is not paid @12% by transporter then reverse charge will be applicable, that may be the case of GTA bill @ 5%, then reverse charge will be applicable in both cases where GST is registered or unregistered. Reverse charge Amount must be paid from cash ledger and can be claimed in the input.
A GTA’s GST Compliant Invoice must have the names of supplier and recipient, vehicle registration number, details of consignment, details of origin and destination, GSTIN of GST payer, details of GTA including GSTIN (if registered), tax invoice number, issuing date, value of consignment taxable, service description, rate of GST applicable, tax amounts with breakup, if RCM is applicable, and the supplier’s signature.
You can refer detailed list under section 9(3) specified goods or services under reverse charge on the following link
Author is a Practing Cost Accountant
Partner at CKC LLP
rehan@gmail.com