On 26th July, 2023, CBIC had issued Notification No. 06/2023- Central Tax (Rate). By way of this notification, a new form was introduced for Goods Transport Agencies (GTAs) who earlier used to pay GST under forward charge, but now wish to pay GST under reverse charge mechanism. GSTN issued an advisory on 01st January 2024 about functionalities for Goods Transport Agencies (GTAs) that are made available on the portal in this regard.
By way of this notification, CBIC provided that the option of paying taxes under the forward charge mechanism by GTAs shall be exercised on or after the 1st of January of the preceding Financial Year but not later than the 31st of March of the preceding Financial Year. Earlier, it was to be exercised on or before the 15th of March of the preceding Financial Year.
Also, it is specified in this notification that the option exercised by GTA to pay GST on the services supplied by it during a Financial Year shall be deemed to have been exercised for the next and future financial years unless the GTA files a declaration to revert under reverse charge mechanism on or after the 1st January of the preceding Financial Year but not later than31st March of the preceding Financial Year. Earlier, if the GTA, who opted for a forward charge mechanism last year, missed filing a fresh declaration for such an option in the current year, GSTN used to automatically change its option to reverse charge mechanism. Now, this requirement is relaxed by CBIC. Once, the forward charge mechanism is opted for any financial year, it will be continued unless specifically opted out by the GTA.
A significant update in this notification is the introduction of the declaration in Annexure VI. A new form is prescribed for exercising option by a Goods Transport Agency intending to revert under the reverse charge mechanism. It is to be filed by GTAs who used to pay GST under forward charge, but now wish to pay GST under reverse charge mechanism. Following is the format of such a declaration:
The GSTN has eased the burden on GTAs paying taxes through the forward charge mechanism by exempting them from the requirement to file declarations annually. Additionally, the transformation of manual form compliance into an electronic format will significantly streamline the process, making it more accessible and user-friendly.
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