Query :

Who shall pay the tax on service charges in respect of services provided by the GTA in respect of transportation of goods by road ? What will be rate of tax on such services in the GST regime ? How this Tax shall be paid ?

 Reply :

  • According to notification No. Ka.Ni.-2-844/XI-9(47)/17. . . . . . Dated June 30 , 2017 it is quite evident that if any person as described in column (1) transports the goods by road by using services of Goods Transport Agency ( GTA ) then liability on the reverse charge basis  shall be on the recipient of such services and the tax on such transportation shall be paid by such recipient person instead of GTA on the service charges claimed by the GTA irrespective of the quantum of turnover of such service charges.
  • According to provisions embodied in clause(g) of sub-section (3) of section 31 , the aforesaid recipient of services shall issue a payment voucher in the prescribed form , which has been stated below , to the GTA.
  • The GST rate of tax on the services provided by the GTA for transportation of goods is 5% ( Entry No. 8 of the List of Services At 5% Rate ).

         ( GST rate = SGST rate + CGST rate )

  • ITC shall be available to the recipient of services in respect of the aforesaid tax paid at the rate of 5% in respect of transportation of goods by using services of GTA.
  • After the issuance of the payment voucher , the due tax shall be paid by the recipient of services after the receipt of the service.
  • GTA need not to be registered for the services of transportation of goods provided by it , as there is liability on reverse charge basis in respect of such services according to the aforesaid Notification 844 of 30th June , 2017 and such persons have been exonerated from the requirement of registration by Notification No. 5/2017-Central Tax Dated  19th June , 2017.
  • It is abundantly clear that if any person is required to pay tax on  reverse charge basis then he will have to get himself registered according to provisions of clause (iii) of section 24 of the SGST/CGST Act , 2017.

Following are the related provisions on the basis of which aforesaid reply has been framed.

  • Clause (f)  and clause(g) of sub-section (3) of section 31 embody following provisions:

(f) a registered person who is liable to pay tax under sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him on the date of receipt of goods or services or both;

(g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier who is not registered under the Act.

  • Sub-section(3) and sub-section (4) of the CGST/SGST Act , 2017 embody following provisions:

(3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

(4) The tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

  • Government has issued notification No. Ka.Ni.-2-844/XI-9(47)/17. . . . . . Dated June 30 , 2017 which embodies following provisions at serial no. 1:

“In exercise of the powers conferred by sub-section (3) of section 9 of the Uttar Pradesh Goods and Services Tax Act , 2017 ( U.P. Act No.1 of 2017 ) , the Governor on the recommendations of the Council is pleased to notify that on categories of supply of services mentioned in column (2) of the Table below , supplied by a person as specified in column (3) of the said Table , the whole of state tax leviable under section 9 of the said Act , shall be paid on reverse charge basis by the recipient of such services as specified in column (4) of the said   Table :-

Table

Sl. No. Category of Supply of Services Supplier of service Recipient of Service

(1)

(2) (3)

(4)

1 Supply of Services by a goods transport agency (GTA) in respect of transportation of goods by road to-

(a) any factory registered under or governed by the Factories Act , 1948(63 of 1948) ; or

(b) any society registered under the Societies Registration Act , 1860 ( 21 of 1860) or under any other law for the time being in force in any part of India ; or

(c) any co-operative society established by or under any law ; or

(d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services tax Act or the State Goods and Services Tax Act or the Union Territory Goods And Services tax Act ;or

(e) any body corporate established , by or under any law ; or

(f) any partnership firm whether registered or not under any law including association of persons ; or

(g) any casual taxable person .

Goods Transport Agency

(GTA)

(a) Any factory registered under or governed by the Factories Act , 1948(63 of 1948) ; or

(b) any society registered under the Societies Registration Act , 1860 ( 21 of 1860) or under any other law for the time being in force in any part of India; or

(c) any co-operative society established by or under any law; or

(d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services tax Act or the State Goods and Services Tax Act or the Union Territory Goods And Services tax Act ;or

(e) any body corporate established , by or under any law; or

(f) any partnership firm whether registered or not under any law including association of persons; or

(g) any casual taxable person; located in the taxable territory.

 

  • Rule-52 of the CGST /SGST Rules , 2017 embodies following provisions :                    52 –Payment voucher.- A payment voucher referred to in clause (g) of sub-section (3) of section 31 shall contain the following particulars, namely:-

(a) name, address and Goods and Services Tax Identification Number of the supplier if registered;

(b) a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters-hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year;

(c) date of its issue; 

(d) name, address and Goods and Services Tax Identification Number of the recipient;

(e) description of goods or services;

(f) amount paid;

(g) rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

(h) amount of tax payable in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess);

(i) place of supply along with the name of State and its code, in case of a supply in the course of inter-State trade or commerce; and

(j) signature or digital signature of the supplier or his authorised representative.

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