Summary of "90% लोग करते हैं ये गलती 👇अगर आप अपने business में समान को transport से भेजते हैं तो जरूर देखें"

GST Reverse Charge Mechanism (RCM) on Goods Transport Agency (GTA) Services

Context & Relevance

Businesses using Goods Transport Agency (GTA) services for moving goods must understand the GST reverse charge provisions applicable to GTA services. This affects how tax is paid and claimed, impacting cash flow and compliance.

Key GST Provisions on GTA Services

Reverse Charge Mechanism (RCM)

When GTA opts for reverse charge, the recipient of the transport service must pay GST at 5% directly to the government instead of the GTA charging GST on the invoice.
The recipient pays GST from their cash ledger and can simultaneously claim input tax credit (ITC), effectively neutralizing the tax cost if properly accounted.
This applies regardless of the invoice amount—there is no minimum threshold for RCM applicability post-July 18, 2022 (previously limits of ₹1500 and ₹750 existed). Even bills as low as ₹1 attract RCM.

Forward Charge Option for GTA

GTA can opt to pay GST under forward charge, charging GST on invoices at either 12% or 18% with ITC, or 5% without ITC.
If GTA chooses forward charge, it must clearly declare this on the invoice so the recipient knows not to pay under reverse charge.
If no such declaration is made, the recipient must pay GST under RCM.

Exceptions to RCM on GTA Services

RCM does not apply if the recipient is: - An unregistered individual or consumer (non-GST registered). - The GTA itself has opted for forward charge and declared it on the invoice. - The recipient is a Central/State Government, Local Authority, or Government Department registered under GST under Section 51.

Business Impact & Operational Considerations

Businesses must verify the GTA invoice for the forward charge declaration to avoid double taxation or compliance errors.
Timely deposit of GST under RCM and claiming ITC is crucial to maintain cash flow and avoid penalties.
GST compliance teams should update their processes to reflect the removal of the minimum invoice limit for RCM applicability on GTA services.
Awareness and training on these GST provisions help prevent common mistakes made by 90% of businesses using GTA services.

Actionable Recommendations

Always check GTA invoices for forward charge declarations.
If absent, prepare to pay GST under RCM at 5% and claim ITC simultaneously.
Update accounting and GST filing systems to handle RCM on all GTA bills regardless of amount.
Educate procurement and finance teams on these rules to ensure compliance and optimize tax credit claims.

Additional Resources

The presenter encourages viewers to subscribe to the CA Guruji YouTube channel for more detailed GST and Income Tax related business compliance content.

Presenter/Source: CA Guruji (YouTube channel)