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GST on Freight Charges and Agency Invoice, Goods and Services Tax - GST

Issue Id: - 114936
Dated: 3-5-2019
By:- FrP CHRISTIEs.j,Director
GST on Freight Charges and Agency Invoice

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Respected Members,

Query 1: We have a business wherein we would be co ordinating with the transporter and buyer for shipment of goods, in this scenario the transporter would invoice to us and we would invoice the same amount (cost to cost) as charged by the transporter to the buyer - Please advise how to go about the GST portion, should we pay GST on RCM charged by the transporter and invoice 18% to the buyer, then the cost for the buyer would be more

Query 2: We would charge the Liaision fee for booking trucks from transporter for the buyer in this scenario are we liable to charge GST at 18%, please advise the correct treatment

Query 3: Will there be any difference if we have 2 invoices separately

Thanks in advance

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Showing Replies 1 to 3 of 3 Records

1 Dated: 4-5-2019
By:- KASTURI SETHI

Are you talking of 'Intermediary Service' between transporter and buyer ? If it is so, such service does not fall under RCM. However, query-wise reply is as under:-

1. RCM comes into play only when GTA opts for payment of GST under Forward Charge Mechanism and for this mechanism he will have to intimate the department in the month of April every year. After opting for FCM, GTA will pay GST @12% (6 % +6%) and avail ITC.Hence Consignor or consignee will not pay GST in this scenario under RCM. See Notification No.22/17-CT(Rate) dated 22.8.17 amending Serial No. 1 of Notification No.13/17-CT(Rate) dated 28.6.17.

2.Liasoining is taxable @18% . It is intermediary service.

3. There is no legal hurdle in maintaining two invoice books for two different purpose.

 


2 Dated: 4-5-2019
By:- FrP CHRISTIEs.j,Director

Dear Sir,

What if the GTA is not registered under GST, then we have to pay on RCM at 5% and invoice to the buyer at 18% since we are not transporters.

Will the position change if we also become GTA, please advise


3 Dated: 5-5-2019
By:- KASTURI SETHI

Best option is to get yourself registered as GTA under FCM and pay GST and avail ITC. Thus it will become cost neutral not only for you but also for your buyer and, in turn, consumer will not suffer. The option of 18% is not digestible.


1

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