FCM & RCM in Transport Business
Query (Issue) Started By: – Karthik Manoharan Dated:- 1-5-2018 Last Reply Date:- 20-2-2019 Goods and Services Tax – GST
Got 21 Replies
GST
Dear Sir,
With ref to the above subject, i doing a transportation business and having a GST registration Number.
Hence, i want to know about the RCM & FCM in GST
So, Kindly do the needful.
With Regards
Karthik M
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
Please refer the provisions of the Act and rules and if any doubt is there then share it in this forum. This forum is not to each a particular aspect.
Reply By KASTURI SETHI:
The Reply:
Rightly expressed by Dr.Govindarajan, Sir. The querist should ask for solution of specific problem/ complicated 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
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vided 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 KASTURI 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
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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 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
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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
consignor 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 carria
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se (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 though 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
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ohan 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 ₹ 1200/-….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 Sec
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