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GST--Recent changes

Recent Statutory Changes Relating to GTA Services

CA. Satyadev Purohit

The GST Council in its 47th Meeting held in Chandigarh on 28-6-2022 & 29-6-2022 has proposed various changes in the GST statutory provisions, procedures and GST rates. In order to give effect to the recommendations of the GST council, various notifications have been issued on 13-7-2022 which shall be effective from 18-7-2022. The learned author seeks to analyse the implications of the recent amendments which have direct bearing on the GTA services.

1. Exercising option to pay tax on forward charge basis

Services of goods transport agency (GTA) in relation to transportation of goods were chargeable to tax at the rate of 5% (without ITC) or at the rate of 12% (with ITC). It is provided that the goods transport agency opting to pay tax at the rate of 12% was liable to pay the tax at the rate of 12% on all the services of GTA supplies by it. Hitherto, the option to pay tax at the forward charge basis was automatic. No specific responsibility was caste on the concerned GTA for the purpose of opting to pay tax at the rate of 12%. Simply reflecting the tax liability at the rate of 12% of the value and paying tax on the same was indicative of the fact that the GTA has opted to pay tax at the rate of 12% with ITC.

Now, the Goods transport agencies have been given option to pay GST at 5% or 12% under forward charge. For the purpose of the above, item (iii) of S. No. 9 of the Notification No. 11/2017-Central Tax (Rate), dt. 28-6-2017 has been amended with effect from 18-7-2022, so as to provide as under:

(a) For the purpose of paying tax on GTA service on forward charge basis at the rate of 5% (without ITC) or at the rate of 12% (with ITC), the GTA is required to exercise the option to itself pay GST on services supplied by it.

(b) The option by GTA to itself pay GST on the services supplied by it during a Financial Year shall be exercised by making a declaration in Annexure V on or before the 15th March of the preceding Financial Year.

(c) For the financial year 2022-23, the option to pay tax on forward charge basis is required to be exercised on or before 16-8-2022.

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