BOMBAY GOODS TRANSPORT ASSOCIATION
18, Mehta Chambers, 2nd Floor, Kalyan Street, Masjid Bunder (E), Mumbai- 400009.
Phone: 022- 2371 9882, 2377 5415 . Fax : 2372 8681 . Website : www.bgta.in
Email : bgta@mtnl.net.in / bgta09@gmail.com / info@bgta.in, CIN No. U63011MH1964GAP012857

IN SERVICE TO THE NATION AND INDUSTRY SINCE 1949

BGTA/GST/2016-2017/124

04 July 2017

TO : ALL MEMBER TRANSPORT COMPANIES

GOODS AND SERVICE TAX

We have received calls from members informing that few customers are pressurizing them to register under GST or else they will not be able to continue business with them.

This circular is being issued by BGTA to all its members so that they can inform their customers the same.

1. As per list or services under reverse charge mechanism (RCM) issued on, 19.05.2017, transportation of goods by road was categorized under RCM. Why?

The main reason for this is that goods transport agencies (GTAs) are unable to claim the input credit on major of their costs. Keeping this in mind, the GST Council has ,decided that the GST payable at 5% on GTA service will be payable by the service receiver under RCM and the input credit will also be taken only by the service receiver.

2. Many customers are not clear that GST paid at 5% under RCM for services received from GTA is fully creditable by the service receiver as Input Tax Credit (ITC).

Kindly note customers paying 5% GST will be able to claim the same in full.

3. As per Notification No 5/2017-Central Tax, if the service provider is providing service to a registered GST entity and the category of service falls under RCM, the service provider does not need to register.

Based on point no 1, since the GTA service falls under RCM, thus the GTA does not have to register. Customers of GTA must note here that transporters are not registered under GST purely because of the nature of business & its classification under GST.

4. Apart from this if a GTA is registered under GST, his overall cost will increase due to various additional GST applicable for which they can’t take any Such costs will eventually increase freight. The GST Council has thus exempted GTA to keep the effect of GST neutral on service users.

We do hope this circular will give clarity to members & also their valuable customers in a smooth transition into GST. Should you still have any queries please email them to BGTA on info@bgta.in or call BGTA office.

JITENDRA R. PARIKH

HONORARY GENERAL SECRETARY

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5 responses to “5 % GST under RCM on Goods Transport Agencies with full Input Credit”

  1. Brijesh Singh pal says:

    Captive consumption
    We used Gst rule

  2. Rajesh Popli says:

    is some of cases when transporter carry good of non gst dealer of both side ( receiver and sender side) he has to pay gst then he has to register under gst under gta

  3. harish sharma says:

    what happen when transport of goods to nepal by road.

  4. S. R. PATEL says:

    It means it is clear that if GTA provides services to any entity then GTA will not be required to take registration Under CGST act 2017 without applying the threshold limit of 20 lakhs. Is it correct.

    • deepak kumar sharma says:

      CORRECT
      if GTA provides services to any entity then GTA will not be required to take registration Under CGST act 2017 without applying the threshold limit of 20 lakhs.

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