Latest Query & Reply

Whether RCM (on fright paid) is applicable on registered dealer engaged in tax free goods?

Reply

As per Section 9(3) of CGST Act, 2017, the government has specified 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.

As per Notification No. 13/2017- Central Tax dated 28/06/2017 the person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the receiver of service.

Therefore, taxpayer falls in above category have to pay tax under RCM.