Place of supply for GTA under GST
By: – CA.VINOD CHAURASIA
Goods and Services Tax – GST
Dated:- 24-8-2017
Introduction: This article discusses in detail about GT place of supply GTA and nature of its taxability under GST.
Query 1: 'A', a buyer registered in Andhra Pradesh receives GTA services from VRl Logistics which is registered in Telangana by way of Transportation of Goods from 'B' who is a registered Dealer in Tamil Nadu. In this Case how the GST is paid under Reverse Charge Mechanism.
Query 2: If transporter is registered & he do not charges GST than is it duty of consignee pay GST & get input credit of GST. And, if transporter is not registered & he sends goods from Delhi to Agra & no GST is charged, now is it duty of consignee to pay GST. Please advise the whether IGST or CGST/SGST is to be deposited?
Ans: As per Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017, “goods transport agency” or GTA means any person who provides s
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nsportation of all such goods for a single consignee does not exceed ₹ 750.
Is a GTA liable to register?
As per Notification No. 5/2017- Central Tax dated 19/06/2017, a person who is only engaged in making supplies of taxable goods/services, where the total tax on which is liable to be paid on reverse charge basis by the recipient as the category of persons exempted from obtaining registration under GST.
Thus, a GTA does not have to register under GST if he is exclusively transporting goods even if the turnover exceeds 20 lakhs as the total tax is required to be paid by the recipient under reverse charge basis.
Services
Turnover
GST Paid by
Case I
Transporting goods of registered dealers or any of the 8 items as mentioned above
12 Lakhs
Registered dealer or recipient of services under RCM
Transporting goods of unregistered persons
4 Lakhs
No one
Total Turnover
19 Lakhs
Aggregate turnover being less than 20 Lakhs, GTA is not required to be registered.
Case II
Tra
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tered under the Factories Act,1948
* A society registered under the Societies Registration Act, 1860 or under any other law
* A co-operative society established under any law
* A person registered under GST
* A body corporate established by or under any law; or
* A partnership firm whether registered or not (including AOP)
* Casual taxable person
Who will pay under Reverse Charge Basis?
As per Notification No. 13/2017- Central Tax dated 28/06/2017, the person who pays or is liable to pay freight for the transportation of goods by road in goods carriage & located in the taxable territory shall be treated as the receiver of service.
What if, the payment is made by sender?
If the supplier of goods (consignor) pays the GTA, then the sender will be treated as the recipient & he will pay GST on reverse charge basis.
What if, the payment is made by receiver?
If the liability of freight payment lies with the receiver (Consignee), then the receiver of goods will be treated as
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Dealer
GTA
Unregistered Individual “A”
Registered Dealer
Unregistered Individual “A”
GTA (If GTA is registered)
GTA
Unregistered Individual “A”
Unregistered Individual “B”
Unregistered Individual “B”
GTA (If GTA is registered)
Rate of Tax
* GTA can opt for 12% GST with ITC or
* 5% GST with no ITC.
However, the GTA has to give an option at the beginning of financial year.
Input Tax credit for the recipient of GTA services
In case of reverse charge, the person responsible for paying tax is the service recipient who is not supplying the GTA service so the concern of using any inputs to supply GTA service does not arise in his case.
He is liable to pay GST only because of RCM.
So GST paid on GTA under RCM can be availed as ITC by the person paying the tax
Place of Supply
As per section 12(8) of 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
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llowing details-
* Name of the consignor and the consignee
* Registration number of goods carriage in which the goods are transported
* Details of goods transported
* Gross weight of the consignment
* Details of place of origin and destination
* GSTIN of the person liable for paying tax whether as consigner, consignee or goods transport agency
* Name, address and GSTIN (if applicable) of the GTA
* Tax invoice number (it must be generated consecutively and each tax invoice will have a unique number for that financial year)
* Date of issue
* Description of service
* Taxable value of supply
* Applicable rate of GST (Rates of CGST, SGST, IGST, UTGST and cess clearly mentioned)
* Amount of tax (With breakup of amounts of CGST, SGST, IGST, UTGST and cess)
* Whether GST is payable on reverse charge basis
* Signature of the supplier
Returns to be Filed by a GTA
If all the services of the GTA fall under RCM then a GTA is not required to register.
If a GTA regi
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if XYZ GTA is also unregistered under GST then, GST is not applicable.
If XYZ is registered, then it will pay GST of 5%. RCM will not apply on Rahul.
Ram, a garments shop owner in Kolkata, hires a truck to deliver goods from wholesaler to his (Ram's) shop. Ram's turnover is less than 20 lakhs and he has not registered under GST. The GTA demands that Ram should pay tax under RCM. Ram argues that since he is not registered, he does not have to pay any GST.
Ans: Only the persons above (Notification No. 13/2017- Central Tax (Rate) dated 28th June, 2017) are required to pay GST under RCM. Unregistered dealers (Ram) purchasing goods/services from unregistered GTA do not have to pay GST under reverse charge mechanism. If the URD hires from a registered GTA, then the registered GTA is liable to pay GST.
So, Ram is not liable to pay GST under RCM.
Ram now purchases garments from Assam and pays for a truck to deliver the goods to his shop in Kolkata. The GTA says that Ram has to register fo
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the garments, automatically he is liable to pay GST under RCM.
Ram decides to voluntarily register. He hires a truck again to transfer goods from the wholesaler to his shop. GTA asks him to pay GST on RCM as he is registered. But Ram's view is that his turnover is still below 20 lakhs.
Ans: The threshold of turnover does not matter if a person is voluntarily registered. All provisions of GST Act will apply to a registered person. Ram is liable to pay GST under RCM.
Ram's turnover has increased to 45 lakhs. He wants to shift to composition scheme as he sells mainly to end consumers. But he is worried as his GTA has told him they would not deliver his goods if he is registered under composition scheme as the GTA become liable for GST.
Ans: This is a myth. Even composition dealers are liable to pay GST under RCM. Ram will pay GST on RCM if he hires a GTA whether he is registered as a composition dealer or as a normal dealer.
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The author is a practising CA based in Delhi and is regi
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