GST on goods transport operator under RCM

My Client is a Registered GTA providing transport services under RCM basis. He has received an order on April 2024 for movement of personal household goods from Mumbai to Pune. The recipient of services is Unregistered. The dealer has not opted for billing under FCM. 1) Should the GTA charge GST@ 5% or treat it as exempt Sales. I understand that there is a notification no 12/2017 (Central Tax Rate) dated [deleted] that exempts such services under Sr. No. 21A. I further understand that since 2022 after the dealer has been given an option to opt for FCM the scenario has changed. Kindly advise. 2) If the GTA can charge GST@5% under RCM basis can he pay GST and avail ITC on the same. Kindly advise

Hey answer to query ,

As per Notification No. 12/2017 - Central Tax , services provided by a GTA (Goods Transport Agency) for transportation of personal household goods by a GTA are exempt from GST if the recipient of the service is an unregistered person. Therefore, in this scenario, since the recipient of the service is unregistered and the dealer has not opted for billing under the Forward Charge Mechanism (FCM), the GTA should treat the service as exempt from GST rather than charging GST at 5%.

If the GTA treats the service as exempt from GST, they will not charge GST on the invoice. Consequently, they will not be required to pay GST under the Reverse Charge Mechanism (RCM) either. Since no GST is charged or paid, the question of availing Input Tax Credit (ITC) does not arise in this case.

However, if the GTA chooses to charge GST at 5% under RCM basis, they can pay GST and avail Input Tax Credit (ITC) on the same, subject to compliance with GST laws and rules. In this case, the GTA would charge GST at 5% on the invoice, pay the GST to the government, and then claim ITC on the GST paid while filing their GST returns.

GST on goods transport operator under RCM

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