Gst-gta
This query is : Resolved
08 February 2019
Respected Experts,
Please give some information.
A- Supplier
B-GTA
A sold goods to SEZ. As per agreement between A & SEZ ,Transportation done by "A".
A arrange B to transport the goods to SEZ.
In such case A paid tax under RCM in IGST or CGST & SGST.
please clarify ??
Thanks & Regards
Ch.satyam Naidu
7032700736
Please give some information.
A- Supplier
B-GTA
A sold goods to SEZ. As per agreement between A & SEZ ,Transportation done by "A".
A arrange B to transport the goods to SEZ.
In such case A paid tax under RCM in IGST or CGST & SGST.
please clarify ??
Thanks & Regards
Ch.satyam Naidu
7032700736
08 February 2019
There are two supplies involve here .
GTA providing transport service to A ( The supplier ) and the second one is A sold goods to SEZ .
As far as GTA service is concerned , A will pay Tax under RCM as normal ( CGST & SGST )
GTA providing transport service to A ( The supplier ) and the second one is A sold goods to SEZ .
As far as GTA service is concerned , A will pay Tax under RCM as normal ( CGST & SGST )
08 February 2019
Good Evening Madam
Thank you soo much for you reply.
But
As per IGST Act Sec.12 (8) (8) The place of supply of services by way of transportation of goods, including by mail or courier to,––
(a) a registered person, shall be the location of such person;
(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.
Amendment of section 12 of IGST Act 2018 In section 12 of the principal Act, in sub-section (8), the following proviso shall be inserted, namely:–– "Provided that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods."
From 01.02.2019 we rise IGST or CGST&SGST.
Please help me Madam
Thank you soo much for you reply.
But
As per IGST Act Sec.12 (8) (8) The place of supply of services by way of transportation of goods, including by mail or courier to,––
(a) a registered person, shall be the location of such person;
(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.
Amendment of section 12 of IGST Act 2018 In section 12 of the principal Act, in sub-section (8), the following proviso shall be inserted, namely:–– "Provided that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods."
From 01.02.2019 we rise IGST or CGST&SGST.
Please help me Madam
26 July 2024
In the scenario where a supplier (A) sells goods to a Special Economic Zone (SEZ) and arranges for a Goods Transport Agency (GTA) to transport the goods, the GST implications can be complex due to the involvement of SEZ and the nature of the transportation services. Let's break down the GST treatment based on the provided details:
### **1. **Understanding the GST Implications**
#### **A. **Transportation of Goods to SEZ**
- **SEZ Transactions**: Goods supplied to SEZs are generally treated as zero-rated supplies under GST. This means that the supplier can claim a refund of the input tax credit (ITC) on inputs used in the supply of goods or services to SEZs.
#### **B. **Place of Supply for Transportation Services**
According to Section 12 of the IGST Act, the place of supply for transportation services depends on whether the recipient is a registered person or not:
- **To a Registered Person**: The place of supply is the location of the recipient.
- **To a Person Other than Registered Person**: The place of supply is the location where the goods are handed over for transportation.
- **Transportation to a Place Outside India**: If the transportation is to a place outside India, the place of supply is the destination of the goods.
### **2. **Applicability of GST on Transportation Services**
#### **A. **Transportation Services by GTA**
- **Under RCM**: If the GTA is providing services to a registered person and the recipient is liable to pay GST under reverse charge mechanism (RCM), the recipient (A) would need to pay GST under RCM.
- **Rates and Tax**:
- If the service is provided to a registered person, IGST is applicable.
- If the service is provided to an unregistered person, the location where the goods are handed over is the place of supply, and CGST & SGST would apply.
#### **B. **Amendment to Section 12**
- **Proviso to Section 12(8)**: The proviso added in 2019 clarifies that if the transportation is to a place outside India, IGST is applicable.
### **3. **Specific Scenario Analysis**
Given that Supplier A sells goods to SEZ and arranges for GTA to transport the goods, here’s how you should handle GST:
#### **A. **GST on Transportation Services**
- **To SEZ (Zero-Rated Supply)**: Since the supply to SEZ is zero-rated, the supplier (A) can claim a refund of ITC. The transportation service provided by GTA falls under the category of services to a place outside India (if considering SEZ as such for practical purposes).
- **IGST Applicability**: Since SEZ is considered a location outside the normal tax area for practical purposes (as per amendments), IGST should be applicable on the transportation services if the GTA service is under RCM.
#### **B. **Reverse Charge Mechanism (RCM)**
- **If A is a Registered Person**: Supplier A, being registered, needs to pay IGST under RCM on the transportation services provided by the GTA, if the GTA is not collecting tax from A.
- **Tax Payment**: A should pay IGST under RCM and can claim this as ITC in their GST returns.
### **4. **Conclusion and Action Steps**
1. **Determine Tax Liability**: Confirm whether the GTA is charging GST or if A is required to pay under RCM.
2. **File Returns**: Pay the applicable GST (IGST under RCM) and report it in the GST returns.
3. **Claim ITC**: As the supply to SEZ is zero-rated, ensure to claim ITC on inputs used in the supply.
### **Example**
Let’s illustrate this with a practical example:
- **Supplier A** sells goods worth ₹1,00,000 to SEZ.
- **Transportation**: GTA charges ₹5,000 for transporting the goods.
- **GST Treatment**: Since transportation is to SEZ and considered a zero-rated supply, A should pay IGST on the transportation service under RCM.
- **IGST Rate**: Assume 18% IGST on ₹5,000 = ₹900.
- **Total GST to be Paid**: ₹900 as IGST on the transportation service.
- **ITC**: Claim ITC on this GST amount as the supply is zero-rated.
### **Action Steps**
1. **Invoice and Payment**: Ensure the invoice from GTA mentions GST, if applicable.
2. **RCM Compliance**: Pay IGST under RCM and report it in GSTR-3B.
3. **Refund Claim**: Since the supply to SEZ is zero-rated, ensure to claim a refund of ITC or adjust it as per GST provisions.
Always verify specific provisions or seek advice from a GST professional for complex cases or updates in regulations.
### **1. **Understanding the GST Implications**
#### **A. **Transportation of Goods to SEZ**
- **SEZ Transactions**: Goods supplied to SEZs are generally treated as zero-rated supplies under GST. This means that the supplier can claim a refund of the input tax credit (ITC) on inputs used in the supply of goods or services to SEZs.
#### **B. **Place of Supply for Transportation Services**
According to Section 12 of the IGST Act, the place of supply for transportation services depends on whether the recipient is a registered person or not:
- **To a Registered Person**: The place of supply is the location of the recipient.
- **To a Person Other than Registered Person**: The place of supply is the location where the goods are handed over for transportation.
- **Transportation to a Place Outside India**: If the transportation is to a place outside India, the place of supply is the destination of the goods.
### **2. **Applicability of GST on Transportation Services**
#### **A. **Transportation Services by GTA**
- **Under RCM**: If the GTA is providing services to a registered person and the recipient is liable to pay GST under reverse charge mechanism (RCM), the recipient (A) would need to pay GST under RCM.
- **Rates and Tax**:
- If the service is provided to a registered person, IGST is applicable.
- If the service is provided to an unregistered person, the location where the goods are handed over is the place of supply, and CGST & SGST would apply.
#### **B. **Amendment to Section 12**
- **Proviso to Section 12(8)**: The proviso added in 2019 clarifies that if the transportation is to a place outside India, IGST is applicable.
### **3. **Specific Scenario Analysis**
Given that Supplier A sells goods to SEZ and arranges for GTA to transport the goods, here’s how you should handle GST:
#### **A. **GST on Transportation Services**
- **To SEZ (Zero-Rated Supply)**: Since the supply to SEZ is zero-rated, the supplier (A) can claim a refund of ITC. The transportation service provided by GTA falls under the category of services to a place outside India (if considering SEZ as such for practical purposes).
- **IGST Applicability**: Since SEZ is considered a location outside the normal tax area for practical purposes (as per amendments), IGST should be applicable on the transportation services if the GTA service is under RCM.
#### **B. **Reverse Charge Mechanism (RCM)**
- **If A is a Registered Person**: Supplier A, being registered, needs to pay IGST under RCM on the transportation services provided by the GTA, if the GTA is not collecting tax from A.
- **Tax Payment**: A should pay IGST under RCM and can claim this as ITC in their GST returns.
### **4. **Conclusion and Action Steps**
1. **Determine Tax Liability**: Confirm whether the GTA is charging GST or if A is required to pay under RCM.
2. **File Returns**: Pay the applicable GST (IGST under RCM) and report it in the GST returns.
3. **Claim ITC**: As the supply to SEZ is zero-rated, ensure to claim ITC on inputs used in the supply.
### **Example**
Let’s illustrate this with a practical example:
- **Supplier A** sells goods worth ₹1,00,000 to SEZ.
- **Transportation**: GTA charges ₹5,000 for transporting the goods.
- **GST Treatment**: Since transportation is to SEZ and considered a zero-rated supply, A should pay IGST on the transportation service under RCM.
- **IGST Rate**: Assume 18% IGST on ₹5,000 = ₹900.
- **Total GST to be Paid**: ₹900 as IGST on the transportation service.
- **ITC**: Claim ITC on this GST amount as the supply is zero-rated.
### **Action Steps**
1. **Invoice and Payment**: Ensure the invoice from GTA mentions GST, if applicable.
2. **RCM Compliance**: Pay IGST under RCM and report it in GSTR-3B.
3. **Refund Claim**: Since the supply to SEZ is zero-rated, ensure to claim a refund of ITC or adjust it as per GST provisions.
Always verify specific provisions or seek advice from a GST professional for complex cases or updates in regulations.
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