How to Record GTA Freight Payments with RCM and TDS in Tally Prime
How to Record GTA Freight Payments with RCM and TDS in Tally Prime
SOP for creating self-invoices for GTA RCM, booking GST payable on reverse charge, claiming ITC, and deducting Section 194C TDS on transport payments.
Who is this for: GST Compliance
Quick Answer: How to Pass GTA Freight RCM and TDS Entries in Tally Prime?
For Goods Transport Agency (GTA) freight under 5% RCM, create a Freight Inward expense ledger with GST set to Applicable and "Is Reverse Charge Applicable" set to Yes. In Purchase (F9), book freight; Tally auto-calculates tax liability in GSTR-3B Table 3.1(d). Deduct 1% or 2% TDS under Section 194C.
- RCM Rate: 5% GST (2.5% CGST + 2.5% SGST) paid by recipient without Input Tax Credit to GTA
- Forward Charge: 12% GST if GTA exercises forward charge option with valid declaration
- TDS Applicability: Section 194C applies if single freight payment > ₹30k or aggregate > ₹1 Lakh
- Exemption: No TDS if transporter owns ≤ 10 goods carriages and submits Form 194C declaration
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:
- Go to Gateway of Tally → Vouchers → Purchase (F9).
- Set the supplier as the GTA party. In the Tax Details, set Supply Type → Inward and GST Nature → Reverse Charge.
- Enter the freight amount. Tally will compute 5% GST (or 12% if the transporter opts for ITC) as the RCM liability.
- 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:
- In the Payment Voucher (F5) for the GTA, enable TDS deduction.
- Select Nature of Payment → Section 194C — Payments to Contractors.
- Tally will compute TDS at 1% (individual transporter) or 2% (company) on the freight value (excluding GST).
- 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.
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