50th GST Council Meeting held on July 11, 2023, recommended the exemption of Goods Transport Agencies (GTAs) from filing yearly GST declarations under forward charge. Aligning with this decision, the CBIC issued Notification No. 08/2023-Union Territory Tax (Rate) on July 26, 2023, to implement the amendment. This article analyzes the implications of this change and its application.
Analysis: Previously, GTAs were required to submit Annexure V annually for GST payment under forward charge. However, the recent amendment frees them from this obligation. According to the updated notification, GTAs opting for this mechanism in a specific financial year will be deemed to have selected it for subsequent years unless they choose to revert to the reverse charge mechanism (RCM).
Impact of the Recommendation & Notification: For the current financial year, GTAs under Forward Charge Mechanism (FCM) who didn’t file the declaration won’t face any issues and will remain under FCM. If GTAs wish to return to RCM from the next financial year (2024-2025), they must file Annexure VI between January 01, 2024, and March 31, 2024. The amendment in the declaration on GTAs’ invoices needs to reflect the change as specified in the notification.
Conclusion: The CBIC’s amendment, in accordance with the 50th GST Council Meeting’s recommendations, has relieved GTAs from filing yearly GST declarations under forward charge. This move simplifies compliance procedures and reduces administrative burdens for GTAs. However, GTAs must carefully consider their GST payment options and timely file Annexure VI if they intend to revert to the reverse charge mechanism. The amendment is effective from July 27, 2023, and will bring about positive changes in the GST filing process for GTAs.
MINISTRY OF FINANCE
(Department of Revenue)
Notification No. 08/2023 Union Territory Tax (Rate)|Dated: 26th July, 2023
G.S.R. 545(E).—In exercise of the powers conferred by sub-section (3) of section 7 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.13/2017-Union Territory Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 704(E), dated the 28th June, 2017, namely: –
In the notification, in Annexure III, for the words and figures “during the Financial Year ____ under forward charge”, the words and figures “from the Financial Year ____under forward charge and have not reverted to reverse charge mechanism ” shall be substituted.
2. This notification shall come into force with effect from the 27th July,2023.
[F. No. CBIC-190354/133/2023-TO(TRU-II)-CBEC]
RAJEEV RANJAN, Under Secy.
Note : The principal notification no. 13/2017 – Union Territory Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 704 (E), dated the 28th June, 2017 and was last amended vide notification no. 02/2023 – Union Territory Tax (Rate), dated the 28th February, 2023 published in the official gazette vide number G.S.R. 146(E), dated the 28th February, 2023.
