RCM on Transport Services: Who Pays GST & Notification 13/2017 Rules
Key Takeaways & Executive Summary
Notification No. 13/2017-Central Tax (Rate) mandates that when a Goods Transport Agency provides freight services to specified registered persons (factories, registered companies, partnership firms, or GST registered entities), the tax liability shifts entirely to the service recipient under RCM.
1. Specified Persons Liable under RCM
The following 7 categories of recipients are liable to pay 5% GST under RCM: (a) Any factory registered under the Factories Act, 1948; (b) Any registered society; (c) Any cooperative society; (d) Any body corporate (Pvt Ltd / Ltd); (e) Any partnership firm; (f) Any person registered under GST; (g) Any casual taxable person.
2. Consignor vs Consignee: Who is the Recipient?
The person who pays or is liable to pay freight is treated as the recipient. For "Paid" bilties, the consignor pays the freight and discharges RCM. For "To Pay" bilties, the consignee pays freight and discharges RCM.
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Frequently Asked Questions
What if both Consignor and Consignee are unregistered individuals?
If neither party falls into the 7 specified categories, the freight service is exempt from GST under Notification 12/2017.
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