Dear Sir, With respect to my earlier query mentioned in link — https://www.taxwallah.com/questions/question/gta-service/ , Pls clarify the following ––
- GTA has not issued Invoice. It has raised Builty (i.e. Consignment Note) on “To Pay” Basis, wherein Consignor name is mentioned as X Ltd and Consignee Name is mentioned as Y Ltd. And in that Builty itself, GTA has mentioned Freight Charges as Rs 10000. And since Builty is on “To Pay” Basis, Y Ltd has paid the Freight Amt . However, as per the Terms between BUYER & SELLER , X Ltd MUST BEAR THE FREIGHT CHARGES . Now query — Considering above facts, Who WILL BE LIABLE TO PAY GST UNDER RCM @ 5% ON FREIGHT — X LTD OR Y LTD ?? PLS TELL THE PROVISIONS IN THIS REGARD ??2. Sir, Various CA of our Company is of the opinion that the person who “actually pays to GTA the freight charges is liable to pay GST @ 5% under RCM.” But as per your reply in the above mentioned link, Pls tell which of the following conclusions as regards payment of GST in case of GTA service under RCM will be correct “”& WHY”” ??
- GST in case of GTA service willl be paid under RCM by the person in whose NAME GTA IS ISSUING INVOICE/ BUILTY (In case Invoice is not issued ) IRRESPECTIVE OF THE FACT THAT who bears freight as per terms of contract between buyer & seller ?? OR
- The person who is actually liable to pay FREIGHT, AS PER THE TERMS OF CONTRACT BETWEEN BUYER & SELLER, IRRESPECTIVE OF THE FACT THAT IN WHOSE NAME GTA issues Invoice/ Builty ?? Thanks a lot….
Why making the transaction so complex??. There are two cases only either FOR wherein transportation is borne by supplier and included in price. In such a case RCM liab is on supplier. However he will charge GST @ applicable on goods on value of frieght charged in the invoice.
The second case comes of ex works price wherein transportation is engaged by recipient and thus it will pay under RCM and supplier will not claim freight in its invoice.
As far as your query goes RCM tax will be paid by person who has privity of contract with GTA and who is liable to pay the frieght to GTA as per contract entered between GTA and such person. Buyer , seller contract is irrelevant here.
Request you are make your terms of contract simple wherein the person who is liable as per contract and person actually making payment are same. This will obviate future disputes..
Team Clearmytax.in