Rcm on freight & cartage

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2016 Hello Sir,

Will rcm applicable if comapny paid cartage to Individual Transporter on stock transfer from state to another state???

CA AJAY KUMAR AGRAWAL

CA AJAY KUMAR AGRAWAL (Expert)
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23 July 2016 Generally Freight / Cartage & some other words are used interchangeably. In case the transporter has issued you GR / Consignment note for the same, Company has to pay ST under RCM. In case the party is registered as "Courier Services" in that case RCM is not applicable i.e. the service provider has to charge & deposit service Tax.

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2016 Sir, if a company purchases the Raw matrial from mr X and Mr. X raises the bill including cartage . this is the purchase cost of company. In that case is RCM applicale??

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CA AJAY KUMAR AGRAWAL

CA AJAY KUMAR AGRAWAL (Expert)
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23 July 2016 No in that case RCM is not applicable. It is applicable only when service is provided under "Transportation of Goods by Goods Transport Agency" i.e. GTA.

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2016 Ajay sir,
service is provided by GTA but the amount of cartage has been mentioned on the bill

CA AJAY KUMAR AGRAWAL

CA AJAY KUMAR AGRAWAL (Expert)
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23 July 2016 In my view ST should be deposited on the full amount of GRN / consignment note, to avoid the dispute by department.

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2016 Ajay Sir, This is purchase cost for the company so why should company deposit the ST.

CA AJAY KUMAR AGRAWAL

CA AJAY KUMAR AGRAWAL (Expert)
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23 July 2016 I had already replied based on the understanding that supplier has charged the amount in bill but you mentioned otherwise. Even in such case if you have not paid transporter anything & transporter has not issued any GRN etc to you, there is no need to deposit Service Tax.

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Rucha A

Rucha A (Expert)
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24 July 2016 mere change of accounting head will not be an escape for rcm.. liability will arise if the provider is GTA and the receiver has paid bill amount to provider..