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Microlesson · 5-min read

RCM on GTA Services – Specified Recipients [Section 9(3)]

# RCM on Goods Transport Agency (GTA) Services

Notification No. 13/2017-CT(R) dated 28.06.2017 notifies categories of services where the entire tax is payable by the recipient under reverse charge. The first entry covers GTA services.

## GTA – The Entry

SupplierServiceRecipient
Goods Transport Agency (GTA)Services by GTA in respect of transportation of goods by roadSpecified recipients

## Specified Recipients (Located in Taxable Territory)

GST under RCM applies when the GTA service is provided to any of the following recipients located in the taxable territory:

1. Factory registered under or governed by the Factories Act, 1948.

2. Society registered under the Societies Registration Act, 1860, or under any other law in force in any part of India.

3. Co-operative society established by or under any law.

4. Person registered under CGST / IGST / SGST / UTGST Act.

5. Body corporate established by or under any law.

6. Partnership firm (registered or not) under any law, including AOP.

7. Any casual taxable person.

## Important Points

  • The recipient must be located in the taxable territory.
  • If the service is provided to a person who is NOT one of the above (e.g., unregistered individual), RCM does NOT apply – the GTA pays GST under forward charge.
  • A partnership firm, even if unregistered (e.g., a small unregistered firm), is a specified recipient.
  • AOP is treated as a partnership firm for this entry.
  • Note: GTA may opt to pay GST under forward charge at 5% (no ITC) or 12% (with ITC) by exercising the option. Once exercised, RCM does not apply on those services.

Worked example

### Example 1

Example 1 (Factory): GTA transports goods for a factory registered under the Factories Act. → Specified recipient → RCM applies; factory pays GST.

### Example 2

Example 2 (Unregistered Individual): GTA transports furniture for an unregistered individual customer. The individual is NOT a 'specified recipient' → RCM does NOT apply; GTA pays under forward charge.

### Example 3

Example 3 (Partnership Firm – Unregistered): GTA transports goods for an unregistered partnership firm. Even though unregistered, a partnership firm IS a specified recipient → RCM applies; firm pays GST.

### Example 4

Example 4 (Casual Taxable Person): A casual taxable person hires a GTA for transporting goods for a temporary exhibition. → RCM applies; the casual taxable person pays GST.

### Example 5

Example 5 (GTA opts FCM): GTA Z has opted to pay GST @ 12% under forward charge. Service provided to a registered factory. → RCM does NOT apply; Z pays GST in its invoice.

⚠️ Common exam mistakes

  • Forgetting that an unregistered partnership firm or AOP is also a specified recipient – RCM still applies.
  • Applying RCM on GTA service provided to an unregistered individual/HUF (non-business) – they are NOT specified recipients.
  • Overlooking the GTA's option for forward charge – if exercised, RCM ceases to apply on those supplies.
  • Confusing services 'in respect of transportation by road' with goods transport in general – the RCM is specifically for GTA road transport, not for railways/courier.
Bare-Act text Entry 1 (read with Section 9(3) of CGST Act) · Notification No. 13/2017-CT(R) dated 28.06.2017 · click to expand
Entry 1 of Notification No. 13/2017-CT(R): Supply of Services by a goods transport agency (GTA) in respect of transportation of goods by road to specified recipients shall attract reverse charge.
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