Skip to content

CA Intermediate · Taxation · Charge of GST

Bharat Logistics Pvt Ltd, Pune (registered), uses a goods transport agency service from Ravi Carriers, an unregistered GTA, to transport goods; freight is Rs 1,00,000 and the GTA has not opted to pay tax under forward charge. The GTA service is taxed at 5% with no ITC and Bharat Logistics is a registered person who is a factory. Both are in Maharashtra. Who pays GST and what is the amount of tax?

Bharat Logistics must pay the tax under reverse charge because the GTA has not opted for forward charge. The tax is 5% of Rs 1,00,000, which is Rs 5,000, and because both parties are in Maharashtra it is paid as CGST Rs 2,500 and SGST Rs 2,500.

  1. ARavi Carriers pays CGST Rs 2,500 and SGST Rs 2,500 under forward charge
  2. BBharat Logistics pays IGST Rs 5,000 under reverse charge
  3. CBharat Logistics pays CGST Rs 2,500 and SGST Rs 2,500 under reverse chargeCorrect
  4. DNo tax is payable as the GTA is unregistered

Explanation

Under notified reverse charge, GST on GTA service is payable by the specified recipient, such as a registered factory, when the GTA has not opted for forward charge. Tax is 5% of 1,00,000 = 5,000. Supplier and recipient are in the same State, so it is CGST 2,500 and SGST 2,500. IGST would apply only if the supply were inter-State.

Did you get it right without looking?

One question tells you little. A timed set on Charge of GST shows your real accuracy, how long you take and where you lose marks.

Practise Charge of GSTFree diagnostic mock

More Charge of GST questions