GST Rate on Detention Charges

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This discussion clarifies the Goods and Services Tax (GST) applicability on detention charges for exported goods. It explains that GST is payable under Reverse Charge Mechanism (RCM) if the transporter's invoice indicates RCM. However, if the transporter charges GST under Forward Charge Mechanism (FCM), then RCM is not applicable. Ultimately, the responsibility for charging GST under FCM or RCM lies with the transporter (GTA).

Urjit Talati

Urjit Talati (Querist)
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07 January 2023 Dear Sir/Ma'am,

I have been Exporting Good and I have been Paying GST on Detention Charges under RCM as per the Transporter invoice as he has mentioned GST is payable under RCM

So whether GST under RCM is payable or GST is Chargable under FCM?

so if GST is Chargeable under FCM can you please provide with me the circular or Notification of Government.

Thanks in advance

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 January 2023 If GTA is charging under FCM, no RCM payable.
But if GTA do not charge under FCM, and asked to pay under RCM, you are liable to pay under RCM.

Urjit Talati

Urjit Talati (Querist)
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07 January 2023 Sir, Which of the way is correct?

RCM or FCM?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 January 2023 Both are correct depending on GTA's option/choice of charging under FCM or not....

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