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The authorities has prolonged the deadline to May 31 for Goods Transport Agencies to train the choice of paying GST on ahead cost foundation for present fiscal.
Under GST, Goods Transport Agencies have the choice to accumulate and pay GST on ahead cost foundation. If they don’t opt to achieve this, the legal responsibility to pay the tax will get transferred to the recipient of the service, below reverse cost mechanism.
To opt for paying Goods and Services Tax (GST) below ahead cost foundation on the price of 12% (with enter tax credit score) and 5% (with out ITC advantages) in a fiscal, a Goods Transport Agency (GTA) has to fill a kind (Annexure V) by March 15 of the previous monetary 12 months.
In an modification to the GST Act, the Finance Ministry in May stated “the option for the Financial Year 2023-2024 (by a GTA) shall be exercised on or before the 31st May”.
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Any entity offering service of products transport by street and issuing a consignment observe for the aim is outlined as GTA below GST, which got here into impact from July 1, 2017.
The modification additional stated {that a} GTA who commences new enterprise or crosses threshold for registration throughout any monetary 12 months, might train the choice to itself pay GST on the providers provided by it throughout that monetary 12 months by making a declaration in Annexure V earlier than 45 days from the date of making use of for GST registration or one month from the date of acquiring registration, whichever is later.
AMRG & Associates Senior Partner Rajat Mohan stated GTA has the choice to pay tax both on ahead cost or reverse cost and each mechanisms have their very own execs and cons.
“Forward charge permits a taxpayer to use tax credit and pay tax only on the differential value added. Reverse charge would obliviate the need to keep detailed records for payment of taxes and would also free up working capital blocked in taxes,” Mr. Mohan added.
