🔹 Short Summary: RCM on Transport Services (Goods Transport Agency – GTA)
- GST under Reverse Charge Mechanism (RCM) applies when a registered person takes transport services from a GTA (who issues a consignment note).
- The recipient (consignee) is liable to pay 5% GST under RCM if the GTA has not opted for forward charge.
- If the GTA opts for forward charge, it can charge 12% GST and claim ITC.
- GTA must file Annexure V to opt for forward charge at the beginning of the financial year.
🧾 RCM on GTA Services – At a Glance
| Condition | Taxable Person | GST Rate | Who Pays GST | ITC Allowed |
| GTA issues a consignment note | Registered Person | 5% (RCM) | Recipient | Yes |
| GTA opts for forward charge (via Annexure V) | GTA | 12% (FCM) | GTA | Yes |
| GTA provides service to unregistered person | GTA | Exempt | No GST | Not Applicable |
| No consignment note issued | Not GTA | Exempt | No GST | Not Applicable |
✅ Who Must Pay Under RCM?
If service is taken by:
- A registered Factory, Company, LLP, Partnership Firm, Society, or Body Corporate
👉 Then RCM applies, and recipient pays 5% GST
⚠️ When RCM Does NOT Apply:
GTA has opted for forward charge
Recipient is an individual (unregistered)
No consignment note is issued
✅ Detailed Understanditng of RCM on Goods Transport Agency (GTA)
✅ What is a Goods Transport Agency (GTA)?
As per Notification No. 12/2017-Central Tax (Rate), a GTA is any person who provides services in relation to the transport of goods by road and issues a consignment note.
Issuance of a consignment note is mandatory for an entity to be considered a GTA under GST.
📌 Applicability of Reverse Charge on GTA
Under RCM, the recipient of service (i.e., the person paying for the transport) is liable to pay GST instead of the transporter, provided certain conditions are met.
👥 RCM Applies When the Recipient Is:
As per Notification No. 13/2017-Central Tax (Rate) (amended), reverse charge applies when GTA services are provided to the following entities:
- A factory registered under the Factories Act
- A society registered under the Societies Registration Act
- A cooperative society
- A GST-registered person
- A body corporate
- A partnership firm or LLP
- A casual taxable person
If the recipient is unregistered, then RCM does not apply and GTA must pay tax under forward charge if opted.
🔁 RCM Tax Rate on GTA
| Nature of Supply | GST Rate | ITC Allowed to Recipient? | Who Pays? |
| Under RCM | 5% | Yes (if used for business) | Recipient |
| Under Forward Charge (opted by GTA) | 12% | Yes | GTA |
GTAs can opt for forward charge @12% with full ITC, but must do so at the beginning of financial year and inform via Annexure V on the GST portal.
📜 Key Conditions for RCM on GTA:
- Consignment note issued? If yes, and recipient falls in specified categories → RCM applies.
- Service provider (GTA) not opted for forward charge? → RCM applies.
- Recipient must be a registered person under GST → Otherwise, forward charge applies.
🧾 Compliance for Recipient (under RCM):
- Pay GST @ 5% under RCM via GSTR-3B
- Claim ITC on the same in GSTR-3B (if used for business)
- Maintain invoice copy and payment proof
- Record the transaction in RCM register
✋ When RCM Does Not Apply on GTA:
- Services provided to unregistered individuals
- No consignment note is issued
- Transport by individual truck owners (not GTA)
🧠 Practical Example:
A registered wholesaler hires a GTA to move goods between two cities. The GTA does not opt for forward charge and issues a consignment note. In this case:
- GST @5% is payable by the wholesaler (recipient) under RCM.
- He can claim ITC if goods are for taxable business supply.
📌 Important Notifications & References:
- Notification No. 13/2017-Central Tax (Rate) – Reverse charge on GTA
- Notification No. 12/2017-Central Tax (Rate) – Exemptions including GTA
- Circular No. 177/09/2022-GST – Clarifications on GTA and RCM/forward charge