Reetu | Jul 27, 2023 |
CBIC notifies major change in RCM Notification; Know the Change
The Central Board of Indirect Taxes and Customs(CBIC) has notified major change in Reverse Charge Mechanism (RCM) Notification Number 13/2017 -Central Tax (Rate), dated the 28th June, 2017 and Exemption Notification number 11/2017 -Central Tax (Rate), dated the 28th June, 2017 on 26th July 2023.
Various Notifications were issued by CBIC regarding the changes in Reverse Charge Mechanism followed by the Goods & Transport Agency (GTAs). Let’s take a look at these notifications.
It has been notified that the last date of exercising the option by GTAs to pay GST under forward charge shall be 31st March of preceding Financial Year instead of 15th March. 1st January of the preceding Financial Year shall be the start date for exercise of option.
This notification shall come into force on 27th July, 2023.
It has been notified w.e.f. 27th July, 2023, that GTAs will not be required to file a declaration for paying GST under forward charge every year. If they have exercised this option for a particular financial year, they shall be deemed to have exercised it for the next and future financial years unless they file a declaration that they want to revert to reverse charge mechanism (RCM).
Under GST, the services of a Goods Transport Agency (GTA) are taxable under Reverse Charge Mechanism (RCM). RCM indicates that the recipient of goods or services bears the tax burden for a specific transaction rather than the supplier.
A GTA is a person who offers services related to road transport of goods and issues a consignment note, by whatever name it is named. The consignment note is a document that provides information on the products being carried as well as the name of the consignor, consignee, and place of delivery.
When a registered person contracts a GTA for the transportation of goods, the GTA is required to pay GST on the transportation services performed. However, under RCM, the beneficiary of the transport service (i.e., the registered person who booked the GTA) is liable to pay GST. The receiver can then claim an Input Tax Credit (ITC) for the GST paid via RCM.
In case of any Doubt regarding Membership you can mail us at [email protected]
Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"
