16 July 2020
C&F will charge GST at what rate 5% or 18% ?
Also In my case
GTA is billing to C&F and in the bill, it is mentioned as GST on Reverse Charge and reflecting in GSTR-2A as reverse charge liability, so C&F has to pay GST on Reverse Charge.
Now when C&F bills to Exporter, Exporter is not accepting bill with GST from C&F and saying that we will pay GST on Reverse charge and you do not charge us GST as on Consignment note name of the exporter is mentioned.
Understanding GST applicability in complex transportation scenarios involving multiple parties can be tricky. Let's break down the GST liabilities and rates for each transaction in your scenario:
#### Transactions: 1. **Transaction A to B**: - **Nature**: Transport Vehicle Owner providing transportation services to GTA. - **GST Applicability**: This is a straightforward transportation service. Generally, for services provided by transport vehicle owners to GTA, GST is not applicable, as it is part of the overall GTA service.
2. **Transaction B to C**: - **Nature**: GTA (B) providing transportation services to C&F Agent (C). - **GST Applicability**: - **Rate**: **5%** (under Reverse Charge Mechanism (RCM)). - **Liability**: C (C&F Agent) is liable to pay GST under RCM. The GTA (B) will indicate “GST under RCM” in the invoice, and C (C&F Agent) must discharge this liability.
3. **Transaction C to D**: - **Nature**: C&F Agent (C) providing transportation services to Exporter (D). - **GST Applicability**: - **Rate**: **18%** (for regular transportation services). - **Liability**: C (C&F Agent) must charge GST at **18%**. Exporter (D) is not generally required to pay GST under RCM in this case unless specifically exempted or zero-rated for export services.
### Scenario Specifics: - **GTA Billing to C&F (B to C)**: The GTA bills the C&F agent and mentions GST under RCM. The C&F agent (C) must pay GST at **5%** on a reverse charge basis. This will be reflected in the C&F’s GSTR-2A.
- **C&F Billing to Exporter (C to D)**: - If the C&F Agent (C) is charging GST at **18%** to the Exporter (D), but the Exporter insists on not paying GST, stating that the GST is to be paid under reverse charge: - The Exporter’s claim might be incorrect unless there are specific exemptions or zero-rating applicable. - Exporters generally claim a refund or zero-rated benefit on GST paid for export services.
### Clarifications:
1. **GST Rates and Liability:** - **B to C**: GST at **5%** under RCM. C (C&F Agent) is liable to pay this GST. - **C to D**: GST at **18%**. C (C&F Agent) must charge GST on the forward charge basis.
2. **Export Scenario:** - If C&F bills D (Exporter) and includes GST, the Exporter can claim a refund on the GST paid (if the service is zero-rated). The Exporter is not required to pay GST under RCM unless the service is explicitly mentioned as zero-rated.
### GST Refunds and Zero-Rating:
- **For Exporters**: Export of services is generally considered a **zero-rated supply** under GST. This means the GST on such supplies can be claimed as a refund. The exporter does not usually pay GST under RCM but can claim a refund of GST paid on inputs and input services.
- **For C&F Agents**: They must charge GST at **18%** when billing to the Exporter, and the Exporter should claim a refund or zero-rating for this GST.
### Reference Notifications:
- **Notification No. 12/2017-Central Tax (Rate)**: For zero-rated supplies. - **Notification No. 11/2017-Central Tax (Rate)**: For rates and conditions for transportation services. - **Section 9(3) and 9(4) of CGST Act**: Defines RCM applicability.
### Conclusion: - **B to C**: GST at **5%** under RCM, paid by C. - **C to D**: GST at **18%** on forward charge, payable by D.
Consult a GST professional for further clarification and ensure compliance with GST regulations.
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