GST on Goods Transport Agency

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-
    • Milk,
    • Salt,
    • Foodgrain,
    • Flour,
    • Pulse,
    • Rice,
    • 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.