Question ID : 40620

TRANSPORTATION SERVICE

Mr. A is a cement dealer and registered to GST. The supplier bills him for door delivery of cement at his premises. Mr. A also owns transport vehicle and collects the loads of cement in his own vehicle from local depot and is paid the transportation charges by the person entrusted with the transportation. Are the transportation charges exempt under GST? Is the person entrusted with transportation liable to pay GST under reverse charge? Does the transportation receipt forms part of his turnover? Whether Mr. A will be treated as GTA under GST?

Answer ID : 80478

Transportation of goods are exempted from GST, But if it is delivered by GTA then GST on reverse charge basis will be applicable (Depends on if the receiver of services is come uder the list of 7 persons). In your que it is not clear whether goods are transported by separate GTA or not and also whether the receiver is registered person or not.

Answer ID : 80480

agree with hargeeth...revrese charge applies if in the list

Answer ID : 80575

In the query, the supplier of dealer is selling cement for door delivery contract and hence is liable to bear the transportation charges for which he is availing GTA services. In this case, since the person to whom risk and reward gets transferred is GTA service provider itself, still basis the defintion it's risky to take a position that without consignment note its not a GTA service (was already a part of litigation during Service Tax regime) Hence advisable to treat this a GTA supply where the supplier will pay GST under RCM and claim ITC. However, the GTA service can be charged by the seller @ GST on Cement resulting in higher tax recovery from the trader resulting in increase of cashflows. Its better to reword the contract where the seller will sell the cement exfactory (resulting in reduction of cement price to the extend of transport cost) and trader (buyer) will transport the goods in its own transport which is exempted under GST (will not be GTA service provider for self)

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