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GTA under both RCM & FCM Mechanism, Goods and Services Tax - GST

Issue Id: - 114062
Dated: 21-8-2018
By:- Prakriti Mish
GTA under both RCM & FCM Mechanism

  • Contents

What would be the implications if a GTA has billed under both RCM and FCM.?

what would happen with the input taken in FCM ? Do we have to follow FCM ?

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Posts / Replies

Showing Replies 1 to 14 of 14 Records

1 Dated: 21-8-2018
By:- Ganeshan Kalyani

GTA service supplier are exempted from GST registration. And if he wants to register then pay gst. Two rate option is available. Pay tax @12% with the benefit of input tax credit. Or pay tax @5% without availing input tax credit. If having registration and filing return is only costs the compliance.

2 Dated: 21-8-2018

Heavens will not fall !!

3 Dated: 21-8-2018

Though a period of one year has elapsed, yet GST Acts are still at infancy stage. That is why Govt. has resorted to unlimited amendments. So ensure that there must not be revenue loss. Procedural lapses are ignorable.

4 Dated: 21-8-2018
By:- Ganeshan Kalyani

Right Sir, agreed with your views. The law is still evolving.

5 Dated: 21-8-2018

I endorse the views of the experts

6 Dated: 23-8-2018
By:- Prakriti Mish

So what should i suggest ? shall i ask them to be in FCM ? Service receivers have took input. Do i need to reverse that input ?

7 Dated: 23-8-2018
By:- Prakriti Mish

Are there any Case Laws under such conditions , Where both RCm and FCM has been charged.

8 Dated: 25-8-2018


Goods Transport Agency Service (GTA)

Allowed option of 12% GST with full ITC under forward charge. 5% GST with no ITC will also continue. (However, the GTA has to give an option at the beginning of financial year)

This is an extract of decisions taken by GST Council's 20th meeting held on 5.8.2017. As per this you cannot adopt hybrid procedure. GTA can wither opt for FCM or RCM. Regarding GTA Service, there is no change between pre-GST era and post-GST era. First liability is cast upon consignor or consignee and , thereafter, GTA comes into play. Practically, normally consignor or consignee pays the freight and they can take ITC after payment of GST in cash.

It is now crystal clear that you cannot opt for both mechanisms i.e. FCM and RCM. If someone has committed such mistake, it is a procedural lapse. In other words, it is a bona fide lapse. You are advised to avoid such dual practice as it may attract maximum penalty of ₹ 25,000/- (General Penalty). Moreover, it is quite clear that burden of proof regarding availment of ITC and correct payment of tax is cast upon assessee.

GST law still being in its infancy stage, such bona fide mistake (one time) may be ignorable by the Govt. because no revenue loss is presumed to be involved.

9 Dated: 25-8-2018
By:- Ramaswamy S

Advisable Forward Charge for ease of operations.



10 Dated: 25-8-2018

Well explained Sethi sir

11 Dated: 25-8-2018

Sir, Thanks for liking and appreciating my reply on the issue.

12 Dated: 27-8-2018
By:- Prakriti Mish

Thank You Sethi Sir for the Reply.

13 Dated: 28-8-2018
By:- Ganeshan Kalyani

I agree with the views of Sri Kasturi Sir.

14 Dated: 8-1-2019
By:- hr hr2

Hello Sir,

A follow-up question:

-> If the GTA (Vehicle Owner) is currently registered under RCM and wishes to move to FCM in the next FY, how would the following cases be treated:

1. If the GTA places own vehicles directly to a manufacturer? (Freight + 12% needs to be charged?)

2. If the GTA places own vehicles through a broker, where broker is unregistered under GST, who needs to pay GST? Example- Goods manufactured by party A is being placed through a GTA party B who asks the broker for a vehicle. The broker hires actual vehicle from GTA party C(vehicle owner), how does the party C bill the broker and which party pays the GST?

3. If the GTA party C, places own vehicle through another GTA Party B, how should party C bill party B?

Your guidance/advice would be highly appreciated.

Thanks in advance.


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