Provisions of the Reverse Charge Mechanism:

Section 9(3) of the Central Goods and Services Tax Act 2017 and Section 5(3) of the Integrated Goods and Services Tax Act 2017 levy GST on a reverse charge basis on the supply of notified goods or services.

These goods or services have been notified by the following master notifications:

• Notification 4/2017 – Central Tax (Rate) and Notification 4/2017 – Integrated Tax (Rate) is the master notification for Reverse Charge Applicability in case of supply of goods.
• Notification 13/2017 – Central Tax (Rate) and Notification 10/2017 – Integrated Tax (Rate) is the master notification for Reverse Charge Applicability in case of supply of services.

Reverse Charge Mechanism on Goods Transport Agency

Entry Number 1 of the RCM Notification No. 13/2017 – Central Tax (Rate) states, notifies RCM on Supply of Services by a goods transport agency (GTA).

Can RCM apply even if the GTA is registered under GST?

Yes, RCM can apply even if the GTA is registered under GST. It is upto the GTA if they want to choose the Reverse charge or the forward charge mechanism.

Rate of GST applicable on GTA services?

• GST Rate of 5% is applicable if GTA is unregistered
• GST Rate of 5% is applicable if GTA is registered but has chosen Reverse charge Mechanism
• GST Rate of 5% is applicable if GTA is registered, has chosen Forward charge Mechanism but has opted not to utilise Input Tax Credit (ITC) to pay GST.
• GST Rate of 12% is applicable if GTA is registered, has chosen Forward charge Mechanism and has opted to utilise Input Tax Credit (ITC) to pay GST.

When to Apply CGST/ SGST or IGST in case of GTA Services?

One is required to analyse 3 sections to give answer to this question

Section 7 of IGST Act: Inter-State supply

Quoting Relevant Text:

7(3) Subject to the provisions of section 12, supply of services, where the location of the supplier and the place of supply are in-

(a) two different States;

(b) two different Union territories; or

(c) a State and a Union territory,

shall be treated as a supply of services in the course of inter-State trade or commerce.

Section 8 of IGST Act: Intra-State supply

Quoting Relevant Text:

8(2) Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply: 

Section 12 of IGST Act: Place of supply of services where location of supplier and recipient is in India

Quoting Relevant Text:

12(8) The place of supply of services by way of transportation of goods, including by mail or courier to, —

(a) a registered person, shall be the location of such person;

(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.

Location of Supplier will be the Location of the Transporter as per Section 2(71) of CGST Act.

When to apply CGST + SGST or IGST in case of GTA Service?

Filing of GST Return and claim of ITC

The claim of Input Tax Credit related to the transportation of goods is not blocked by section 17(5), provided there are no other restrictions.

The GST Return Related compliance are as follows:

Unregistered GTA: 5% GST Rate Applicable

Registered GTA: Choose RCM and 5% GST Rate

Registered GTA: Choose FCM and 5% GST Rate

Registered GTA: Choose FCM and 12% GST Rate

I have tried to cover all the points. Please let me know the things that are missing. Will cover them as well.