As per Rule 138 of the CGST Rules, every registered person under GST has to generate Part A of FORM GST EWB-01, when goods worth more than Rs 50,000 are being transported in relation to supply or for stock transfer from one location to another location or for movement of material for other than supply or in case of inward supplies from unregistered taxpayers.
As per Notification No. 45/2017 – Central Tax, details related to Inward supplies received from a registered supplier (other than supplies attracting reverse charge) are not required to be reported in Section 4A of the GSTR – 4 for July 2017 to September 2017 and October 2017 to December,2017quarters.
If a taxpayer has missed any outward supplies or inward supplies invoices amounts while filing GSTR – 3B, those invoices can be included in the GSTR – 1 and GSTR – 2 and the output liability and input tax credit will be considered in the GSTR – 3 and if any amount is payable the same can be paid. As there is no edit option available for GSTR – 3B, this approach can be taken and be tax compliant.
Before we go and conclude on the topic “Does GTA Services fall under Notification No.8/2017- Central Tax (Rate)” first let’s understand what is reverse charge? where it is applicable along with in which cases it is exempted.
In the normal course of business, taxes are paid by the recipient of goods or services or both to the supplier of goods or services or both and the supplier, in turn, remits the amount of tax collected to the respective tax authorities. In case of reverse charge, the recipient will pay on behalf of the supplier of goods or services or both. This is clearly defined in sub-section 98 of Section 2 of CGST Act
“reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or subsection (4) of section 5 of the Integrated Goods and Services Tax Act;
The category of goods or services on which reverse charge is applicable is clearly defined sub-section (3) of section 9 of CGST Act
The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
Sub-section (4) of section 9 of CGST Act defines clearly states that in case of supply of goods from unregistered taxpayers, the recipient should pay taxes.
The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
Notification No.4/2017-Central Tax (Rate), clearly gives the list of goods on which reverse charge is applicable.
Notification No. 13/2017- Central Tax (Rate) provides the list of services under which reverse charge is applicable on the list of services under CGST Act.
From the above two notifications, it is clear that Reverse charge is applicable on all inward supplies of goods and services. Previously Reverse Charge was applicable only for the services and now under GST it is applicable for the goods also. As GST is a new and taxpayers who are registered under VAT in the erstwhile regime may or not may not be aware in all the states. In order to provide some ease of doing business, the government has given some exemptions for the applicability of Reverse Charge on inward supplies wide Notification No.8/2017-Central Tax (Rate), the same is given below
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017):
Provided that the said exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, exceeds five thousand rupees in a day.
Now in the trade, one question which is asked very frequently is that is reverse charge exemption applicable on services like GTA, hamali charges or other freight charges paid by the taxpayers on day to day basis?
If we go through Notification No.8/2017-Central Tax (Rate), it is given for all the inwards supplies from unregistered tax payers by a registered taxpayer. So the above question does not arise that. If the inward supplies based on the above are below Rs 5000 in a day, then reverse charge is not applicable and benefit of the said notification can be taken.
If you have any different view, please share your views in the comments section so that it will be helpful for coming to a common understanding.
As per Rule 46 of CGST Rules 2017, in the case of inward supplies of reverse charge where the inward supplies are more than Rs 5,000 per day, a consolidated tax invoice can be issued at the end of the month for all such transactions during the month.
In section 4( B ) of GSTR – 3B, input tax credit availed at the time of inward supply being reversed on account of using the same inputs used for taxable supplies and exempted supplies. Reversal of such input tax credit has to be done for both the inputs and the capital goods. Input tax credit reversed for any other reasons issue of free goods or used for employee purpose or used for non-business purpose.
In subsection A of Section 4 of GSTR – 3B, input tax credit availed during the month has to be shown separately for all the taxes for import of goods, import of services, inward supplies from ISD, inward supplies which attract reverse charge along with any other sources from where ITC is claimed that is for the inward supplies of goods and services together.