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GTA Services and ITC, Goods and Services Tax - GST

Issue Id: - 117537
Dated: 1-10-2021
By:- Kaustubh Karandikar
GTA Services and ITC

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The Goods Transport Agency (GTA) had charged 5% GST in the invoice against transportation charges to XYZ Ltd. XYZ had claimed input tax credit against this. 1) Whether XYZ is eligible to claim such ITC? 2) If not, what is the correct procedure? I my view, XYZ can claim ITC only when the GTA is charging 12% GST. But no reverse charge to XYZ if GTA charging 5% GST. Views of the experts please.

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Showing Replies 1 to 5 of 5 Records

1 Dated: 1-10-2021
By:- Shilpi Jain

RCM would be applicable for XYZ, since the GTA would satisfy the condition in the RCM notification of being a person who has not paid tax @ 12%.

So suggested that XYZ recovers the 5% tax from GTA and pays to department (along with interest if late paid).

If this is not possible, XYZ would still be eligible for the GST paid to supplier as it falls under the def of ITC under GST.


2 Dated: 7-10-2021
By:- KASTURI SETHI

I support the views of Madam Shilpi Jain.


3 Dated: 10-10-2021
By:- Ganeshan Kalyani

Sir, recipient of GTA service is eligible to take ITC in both cases i.e. GTA charging 5% or 12% GST on invoice.


4 Dated: 10-10-2021
By:- KASTURI SETHI

Sh.Ganeshan Kalyani Ji,

Your understanding, interpretation, analysis and viewpoint are absolutely correct.


5 Dated: 10-10-2021
By:- Shilpi Jain

Agreed. Somehow the trade and industry seems to have a doubt whether they will be eligible for credit as recepient.

The restriction of credit is only for the service provider GTA if the recipient is paying GST @5% under RCM.


1

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