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GST ITC Eligibility on Freight Bill to Service Recipient

Arjun Gupta (Chartered Accountant) (177 Points)

20 August 2022

Can a service recipient claim ITC on freight invoice which includes GST @ 5%?

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19 Replies

Sai Allu (754 Points)
Replied 20 August 2022

Service receivers can always avail ITC on GST paid under RCM.22-Jul-2022
Service by a GTA: GST rate
Any other goods: 5% No ITC OR 12% with ITC
Hiring out vehicle to a GTA: 0%

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CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 20 August 2022

Check RCM applicable or not ???

3 Like

Eswar Reddy S (CFO- at NHTF) (58270 Points)
Replied 20 August 2022

If it is for business purposes then it can be claimed

2 Like

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 20 August 2022

Freight is for business but here is to check whether RCM applicable or not.

1 Like

Eswar Reddy S (CFO- at NHTF) (58270 Points)
Replied 20 August 2022

If it is RCM then this question won't araise since credit will be in subsequent month

1 Like

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CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 20 August 2022

RCM credit available in the same month of payment

2 Like

sabyasachi mukherjee (27579 Points)
Replied 21 August 2022

The statutory provision nowhere states that the service recipient is deemed supplier of goods.Considering from this angle the service recipient is deemed supplier of services.In caee of reverse charge , the service recipient is only discharging the liability of supplier of service.
It is not a necessity to register under gst in case for the service recipient.
claiming of input tax credit is not barred.
But in case of gta provisions of Sec 17(5) is applicable.

1 Like

Eswar Reddy S (CFO- at NHTF) (58270 Points)
Replied 21 August 2022

GST paid under RCM will be credited to electronic cash ledger and adjusted against liability..

Credit will be eligible only after filing the GST returns. So same month can't claim for ITC and used for RCM liability in the month of payment

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 22 August 2022

Here query is credit available or not, what sense is here in telling ITC availt in same month or next .

2 Like

Arjun Gupta (Chartered Accountant) (177 Points)
Replied 23 August 2022

Thanks for the prompt response from all the professionals. But I guess my query has been linked with the RCM provisions. I would try to reiterate my query in a more clear manner-

If a Transporter issues an Invoice/ Consignment Note at concessional rate of 5% to it's customer (customer is herein referred as service receiver), then whether in such scenario the Service Recipient can claim ITC of this 5% which is mentioned in the invoice of GTA? Kindly note- this is a pure case of Forward Charge Mechanism rather than Reverse Charge.

3 Like

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Rajendra Prasad (Employee Private) (1867 Points)
Replied 23 August 2022

Yes, you can avail ITC there is no any restriction.

1 Like

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 23 August 2022

You can claim ITC for that.

1 Like

uma shankar (proprietor) (140 Points)
Replied 24 August 2022

In my opinion it can be claimed only if appearing in 2B. Some GTAs mention GST rate in CN/Invoice But Do Not Charge the GST amount , thatmeans they do not collect GST amount. In that case it will be a case of RGM.

1 Like