GTA Freight Services: 5% RCM vs 18% Forward Charge & ITC Accounting SOP
July 24, 20269 min readAkib Husain
GTA Freight Services: 5% RCM vs 18% Forward Charge & ITC Accounting SOP
In-depth GST tax guide on freight charges, Goods Transport Agency (GTA) reverse charge rules, consignment note requirements, and Tally Prime purchase entries.
Who is this for: GST RCM Rules
Quick Answer: How Does GTA Freight RCM & ITC Work in GST?
Freight services by a Goods Transport Agency (issuing a Consignment Note) fall under either 5% RCM (recipient pays 5% cash tax and claims ITC) or 18% Forward Charge (GTA pays 18% and claims full ITC). Freight paid to non-GTA individual truck drivers without consignment notes is exempt.
- RCM rate is 5% paid in cash via Electronic Cash Ledger by the freight recipient.
- RCM tax paid in cash is 100% claimable as Input Tax Credit in the same month.
- Consignment Note is legally mandatory to distinguish GTA from exempt individual transport.
- TrulyInvoice detects GTA freight bills and flags RCM tax ledgers automatically in Tally.
1. Freight Tax Matrix: 5% RCM vs 18% Forward Charge
| Mechanism | Tax Rate | Who Pays Tax? | GTA ITC Eligibility | Recipient ITC |
|---|---|---|---|---|
| Reverse Charge (RCM) | 5% | Service Recipient (Buyer/Seller) | No ITC | 100% Eligible |
| Forward Charge (FCM) | 18% | GTA Transporter | Full ITC (Fuel/Trucks) | 100% Eligible |
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Akib HusainExpert Reviewer
Founder & Chief Architect of TrulyInvoice
Last Verified: July 24, 2026
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