Question ID :
31744
RCM Tax
The understanding between seller and purchaser of goods is that seller will send the goods by lorry at the cost of the buyer.
Seller collects transportation charges separately in the invoice and charges GST on that amount at the some rate as applicable to goods supplied.
Seller engages a lorry and pays the equivalent amount to the transporter as freight.
The question is whether the seller has to pay GST on freight charges paid by him under RCM.
Posted by
Ethirajan
on
Jul 18, 2018
Filed Under
GST
As the contract is clear and seller is charging GST at the rate of the goods on the gross amount, the seller himself has to pay the RCM and would be eligible for credit.
Posted by
Madhukar N Hiregange on
Jul 19, 2018
Answer ID :
70877
GST on reverse charge basis, on transport charges, is payable by the person who is liable to make payment to the transporter.
If the terms of understanding between Buyer and Seller is such that the Seller pays the transporter and collects this amount on the invoice as 'freight', GST on RCM is payable by Seller. And payment of transport charges will be taxed at the rate of GST applicable to the principal supply by Seller.
Please refer composite supply 2(30) of CGST Act, especially the illustration provided under that section.
Posted by
CA. JATIN CHRISTOPHER A on
Jul 25, 2018
Answer ID :
71879
In this case seller is responsible to pay the freight and therefore he has to pay the RCM.
Posted by
Madhukar N Hiregange on
Jul 28, 2018