Exemption available to transportation of goods by road vis-à-vis GTA services-
As per serial no. 18 to Notification no. 12/2017 dated 28th June 2017, GST is exempt in case of services by way of transportation of goods by road. However, the exemption is not available to the following services-
- Goods are transported by a goods transport agency; and
- Goods are transported by a courier agency.
In nut-shell, goods transported through GTA is taxable under GST.
Meaning of ‘Goods Transport Agency’ and ‘consignment note’-
Notification no. 11/2017 dated 28th June 2017 covers the definition of the term ‘Goods Transport Agency’ (GTA). Accordingly, GTA means as under-
- A person who provides service in relation to goods transport by road; and
- issues consignment note (by whatever name called).
As seen above, ‘Consignment note’ is a document issued by a GTA against receipt of the goods for the purpose of transporting in a goods carriage. A consignment note is serially numbered and contains some of the following basic details-
- Name of the consignor;
- Name of the consignee;
- Registration number of the carriage of the goods;
- Place of origin;
- Details of the goods;
- Place of destination.
Rate of GST payable on transportation charges-
The rates of GST applicable to GTA services are amended and prescribed under Notification no. 20/2017 dated 22nd August 2017. Accordingly, GST rates are as under-
5% – Input tax credit charged on goods/ services used for supplying GTA service is not available.
12% – GTA opting to pay a central tax of 6% will be liable to pay a central tax of 6% on all the services of GTA supplied by it.
Applicability of reverse charge mechanism (RCM)-
Notification no. 13/2017 dated 28th June 2017 notifies the services on which tax is payable by the service receiver on a reverse charge basis.
Accordingly, reverse charge mechanism will be applicable under Goods Transport Agency service in case all the following conditions are satisfied-
1) – Service provider is a Goods Transport Agency who has not paid central tax @6%; and
2) – Service receiver is any of the following people-
- A factory (registered under the Factories Act, 1948),
- A co-operative society,
- A society (registered under the Society Registration Act, 1860 or under any other law),
- A person registered under GST under any of the following Act-
- Central Goods and Services Tax Act;
- Integrated Goods and Services Tax Act;
- State Goods and Services Tax Act;
- Union Territory Goods and Services Tax Act.
- A body corporate,
- A partnership firm (including an association of person), or
- A casual taxable person.
3) – The specified service receiver (as per the list above) is located in taxable territory.
List of exempted services-
The following list of services provided by a GTA is exempt from GST-
- Transport of agricultural produce,
- Transport of goods, wherein, the gross amount charged for transportation for a consignment transported in a single carriage doesn’t exceed INR 1500,
- Transport of goods, where, the consideration charged for transportation of all such goods for a single consignee doesn’t exceed INR 750,
- Transport of goods like-
- Organic manure,
- Newspaper or magazines which are registered with the registrar of newspapers,
- Relief material for victims of man-made or natural disasters/ accidents/ calamities/ mishaps,
- Defense/ military equipment.
- Transport of goods to following person registered under CGST as TDS deductor-
- A department/ establishment of the Central or State Government or Union territory,
- Local authority,
- Governmental agencies.