An overview of GST on GTA – RCM vs Forward Charge

 

Goods Transport Agencies (GTA) operate under two GST models, impacting tax compliance and reporting. Here’s a detailed breakdown:
Choosing between RCM and FCM affects cash flow and compliance. Businesses must evaluate their position carefully.

Let us have a short overview of the provision in the form of FAQs on GTA & GST Compliance:

1. What are the GST options for GTA?
• Reverse Charge Mechanism (RCM) – 5%: GST is paid by the recipient, and the GTA cannot claim ITC.
• Forward Charge Mechanism (FCM) – 5% or 12%:
• 12% GST: GTA charges GST and can claim ITC.
• 5% GST: GTA charges GST but cannot claim ITC.

2. What is the place of supply for GTA services?
• If the recipient is registered, the place of supply is the recipient’s location.
• If the recipient is unregistered, the place of supply is where transportation originates.

3. How does a GTA report GST in GSTR-1 and GSTR-3B?
Under RCM (5%):
• The GTA does not report the supply in GSTR-1. If reciever is B2B GTA will report in table 4 by clicking tick box of Reverse Charge applicable
• The GTA does not report GST liability in GSTR-3B.
• The recipient reports the tax in GSTR-3B (Table 3.1(d)) and GSTR-1 (Table 13).
Under FCM (5% or 12%):
• The GTA reports outward supplies in GSTR-1 (Table 4 or Table 7).
• The tax is paid in GSTR-3B (Table 3.1(a)), and ITC (if eligible) is claimed in Table 4(A).

4. What if the recipient is an unregistered person?
• If an unregistered person avails GTA services, GST under RCM is not applicable.
• The GTA must pay GST under FCM

5. What is the taxable value for GST on GTA services?
• The taxable value includes freight charges.
• Exemptions apply for certain essential goods like milk, agricultural produce, and newspapers.