Is RCM applicable on transport services?

Is RCM applicable on transport services?

Even composition dealers are liable to pay GST under RCM. Anand will pay GST on RCM if he hires a GTA whether he is registered as a composition dealer or as a normal dealer….What is the rate of GST on GTA?

Who is a goods transport agency?

Who is a GTA – Goods Transport Agency? As per Section 65B (26) of the Finance Act, 1994; “Goods Transport Agency means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called”.

Is RCM applicable on transportation of exempted goods?

Please clarify whether a GTA providing service in relation to transportation of goods by road under reverse charge mechanism (RCM) can avail of the benefit of this exemption. Answer: Yes, a GTA providing service in relation to transportation of goods by road under RCM can avail of the benefit of this exemption.

On which services RCM is applicable?

In the present scenario, the reverse charge mechanism is applicable in service tax for services like Insurance Agent, Manpower Supply, Goods Transport Agency, etc. Unlike Service Tax, there is no concept of partial reverse charge. The recipient has to pay 100% tax on the supply.

What is reverse charge mechanism GST?

Generally, the supplier of goods or services is liable to pay GST. Reverse Charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply.

What is the reverse charge mechanism when is reverse charge mechanism applicable under section 9 3 and 9 4 of Cgst act?

Section 9(4) of the CGST Act states that if a vendor is not registered under GST supplies goods to a person registered under GST, then reverse charge would apply. This means that the GST will have to be paid directly by the receiver instead of the supplier.

What are the supplies on which reverse charge mechanism would apply?

Is ITC available on reverse charge on GTA?

If a GTA chooses this option, then the recipient of goods or services is required to pay GST at the rate of 5% under reverse charge. However, the recipient of GTA service discharging the tax liability is entitled to take Input Tax Credit (ITC) of the amount of tax paid under reverse charge.

Is RCM applicable on Interstate supply?

The registered buyer who has to pay GST under reverse charge has to do self-invoicing for the purchases made. In intra-state purchases, CGST and SGST have to be paid under reverse charge mechanism (RCM) by the purchaser. Also, in the case of inter-state purchases, the buyer has to pay the IGST.

Is reverse charge applicable on goods?

Member States can impose reverse charge on domestic supplies of goods and services where the supplier is not established and the transaction is located in the country of the supplier.

Who is covered under reverse charge mechanism?

Reverse Charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply.

When is reverse charge applicable to goods transport agency?

As per Entry No. A (ii) of N/No.-30/2012, reverse charge is applicable only when taxable service provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, where the person liable to pay freight is, – any factory registered under or governed by the Factories Act, 1948 (63 of 1948);

When to get Yourself registered under Reverse Charge Mechanism?

Under General Charge Mechanism a service provider is required to get himself registered after the limit of Rs.9 Lakh taxable service is crossed. However under Reverse Charge Mechanism a person liable to pay service tax is required to get himself registered within 30 days of the date on which liability to pay service tax arises.

When was Reverse Charge Mechanism ( RCM ) introduced in GST?

A Quick Understanding on Reverse Charge Mechanism (RCM) on Goods Transport Agency (GTA) Services It has been more than a couple of years since GST was launched on 1 st July 2017 but the organisations are yet to get settled down and adopt it with full clarity.

Who is liable to pay service tax under Reverse Charge Mechanism?

However in Reverse Charge Mechanism Service Receiver is made liable to pay service tax and comply with other provisions of Finance Act, 1994. In case of GTA, a person liable to pay the freight for the transport of goods has also been made liable to pay service tax.