EXAMPLE-83
Y Ltd a goods transport company transported goods to B, an individual registered under GST Act. The consideration charged by the Y Ltd for the transportation of goods by road is Rs. 200000.

(i) Determine who is liable to pay GST and also determine tax liability under GST.
(ii) Determine who is liable to pay GST, if Mr. B is individual and not registered under GST.

Answer

Services provided or agreed to be provided by a goods transport agency (GTA) in respect of transportation of goods by road is under Reverse charge as approved by GST Council.
But the pre-condition of this reverse charge is service recipient is any of the following category:-

a) any factory registered under or governed by the Factories Act, 1948;
(b) any society registered under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India;
(c) any co-operative society established by or under any law;
(d) any person registered under CGST/SGST/UTGST Act;
(e) anybody corporate established, by or under any law; or
(f) any partnership firm whether registered or not under any law including association of persons.
(g) Casual taxable person

(i) In view of the provision as service recipient is person registered under GST, hence Mr. B will be liable to pay GST on charges for the goods supplied to them.

According to Payment of Taxation Rules, tax on reverse charge will be paid only through E-cash ledger.

Tax liability in this case:-
Under GST, no abatement on freight is available, hence, entire freight amount is taxable @ 5% with No ITC.
Thus liability of GST = Rs. 200000*5% = Rs. 10000

(iii) If Mr. B is an  unregistered individual then, GTA will also not liable to pay tax vide notification no.12 or  9 (CGST/IGST(Rate))  amended vide notification 32 or 33/2017-(IGST(Rate)) which states that Services provided by a goods transport agency to an unregistered person, including an unregistered casual taxable person are exempt from tax.

So in this particular case both GTA & Mr. Y both are not liable to pay tax under the act with the effect from 13.10.2017.