How to Record GTA Freight Payments with RCM and TDS in Tally Prime

Manufacturers, traders, and distributors frequently hire Goods Transport Agencies (GTAs) for freight movement. GTA services carry a dual compliance burden — GST under Reverse Charge Mechanism (RCM) and TDS under Section 194C — making correct Tally entries critical for regulatory compliance.

This guide provides step-by-step instructions for recording GTA payments in Tally Prime with proper RCM and TDS treatment.

1. Setting Up GTA RCM Ledgers in Tally

Create these ledger accounts before recording GTA transactions:

• "Freight Charges (GTA)" — under Indirect Expenses. Set GST Applicable → Yes, GST Nature → Reverse Charge Inward.
• "GST Payable on RCM" — under Duties & Taxes (IGST or CGST/SGST depending on inter-state/intra-state).
• "ITC on RCM" — under Current Assets (to record claimable input credit).
• "TDS Payable u/s 194C" — under Current Liabilities.

2. Creating a Self-Invoice for GTA RCM

Under GST, recipients of RCM services must issue a self-invoice. In Tally:

1. Go to Gateway of Tally → Vouchers → Purchase (F9).
2. Set the supplier as the GTA party. In the Tax Details, set Supply Type → Inward and GST Nature → Reverse Charge.
3. Enter the freight amount. Tally will compute 5% GST (or 12% if the transporter opts for ITC) as the RCM liability.
4. The RCM liability is split across IGST Payable on RCM (inter-state) or CGST + SGST Payable on RCM (intra-state).

3. Deducting TDS Under Section 194C

If TDS is applicable on the freight payment:

1. In the Payment Voucher (F5) for the GTA, enable TDS deduction.
2. Select Nature of Payment → Section 194C — Payments to Contractors.
3. Tally will compute TDS at 1% (individual transporter) or 2% (company) on the freight value (excluding GST).
4. The net payment to the GTA is: Freight Amount + GST (if any) − TDS Deducted.

4. GSTR-3B Reporting for GTA RCM

GTA RCM transactions appear in:

• GSTR-3B Table 3.1(d): Inward supplies under Reverse Charge (tax liability).
• GSTR-3B Table 4(A)(3): ITC available from Reverse Charge — claimable in the same or subsequent return period after payment of RCM tax.