The GST Network (GSTN) announced a new GST portal option on February 25, 2023, allowing all Goods Transport Agencies (GTA) to choose to pay GST on a forward charge.
The revision follows the CGST rate announcement number 3/2022, which was published on July 13, 2022, the previous year. In addition to the reverse charge option, the CBIC informed the Goods Transport Agencies (GTAs) that they may pay GST on a forward charge basis at 5% (without tax credit) or 12% (with tax credit).
The change simplified how enterprises that provide goods and transport agency services are taxed under the GST. Nevertheless, the announcement also stipulated that, in order to opt into GST payment on a forward charge, such interested taxpayers must file a declaration prior to the beginning of the fiscal year using Annexure V.
On the GST portal, the option to make declarations is now available. For the fiscal year 2023–2024, the deadline for taking action is March 15, 2023. Taxpayers who qualify may go to www.gst.gov.in. After logging in, users must choose the ‘Services’ page, go to the ‘User Services’ section, and select the ‘Opting Forward Charge Payment by GTA (Annexure V)’ button.
Every year, before the start of a new fiscal year, taxpayers who offer GTA services must take action on Form Annexure V on the GST portal. Only those who wish to pay GST on a forward charge basis for the duration of the fiscal year may submit this form. They will continue to be taxed on a reverse charge basis if not.
Another crucial point to remember is that the decision cannot be changed in a mid-financial year and must be made by 15 March of the fiscal year prior to the applicable fiscal year. As a result, the GST portal now accepts Annexure V submissions for GTAs, and it will remain open until March 15th, 2023, for the fiscal year 2023–2024.
Each time they generate GST e-invoices, such GTA taxpayers who choose to pay GST on a forward charge must report as per Annexure III that they are registered for GST and have chosen to pay GST using a forward charge method in addition to the yearly declaration. It informs the recipients that their GTA supplier is billing them for tax and does not have to pay GST as a result of a reverse charge.
Options’ effects are decoded
On their purchases, the GTAs must decide whether to impose 5% GST without Input tax credit claims or 12% GST with claims. If GTAs wish to maintain compliance while improving the volume and cost of their sales, they should move to forward charge. If their vendor base is less compliant or non-compliant, or if they work primarily with suppliers in unregulated industries, they can opt for a 5% GST fee. On the other hand, if they work with regulated industries or have a vendor base that complies, they can opt for a 12% GST fee.
