Background:
Earlier, the 50th Meeting of the GST Council was held on July 11, 2023 in New Delhi, wherein it was recommended that the Goods Transport Agency (“GTA”) would not be required to file a declaration in Annexure V on a yearly basis.
Notification:
Now, the CBIC vide Notification No. 08/2023-Central Tax (Rate) dated July 26, 2023 has issued an amendment in Notification No. 13/2017- Central Tax (Rate) dated June 28, 2017 to implement the decisions of the 50th GST Council meeting.
It has been notified w.e.f. July 27, 2023, GTAs will not be required to file a declaration for paying GST under forward charge every year. If they have exercised this option for a particular financial year, they shall be deemed to have exercised it for the next and future financial years unless they file a declaration that they want to revert to the reverse charge mechanism (“RCM”).
In the Notification, in Annexure III, for the words and figures “during the Financial Year____ under forward charge”, the words and figures “from the Financial Year _______ under forward charge and have not reverted to reverse charge mechanism” shall be substituted.
Impact of Recommendation & Notification –
- For the current FY, even if a GTA is under Forward Charge Mechanism (“FCM”) and did not file the declaration, there will be no issue, and they will remain under FCM.
- In case GTA wishes to come back under RCM from Financial Year 2024-2025, they must file Annexure VI between January 01, 2024, and March 31, 2024.
- Amendment in Declaration in Annexure III on the invoice of the GTAs need to be made as follows – from the Financial Year _______ under forward charge and have not reverted to reverse charge mechanism.
Similar notifications have been passed under the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) and the Union Territory Goods and Services Tax Act, 2017 (“the UTGST Act”).
The CGST (Rate) Notification: https://egazette.gov.in/WriteReadData/2023/247632.pdf
The IGST (Rate) Notification: https://egazette.gov.in/WriteReadData/2023/247632.pdf
The UTGST (Rate) Notification: https://egazette.gov.in/WriteReadData/2023/247632.pdf
(Author can be reached at info@a2ztaxcorp.com)
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