Transportation is a vital part of the economy as any problem in transportation disrupts the entire business channel. This is why any petrol price change has a far-reaching effect in disruption of business. We have covered articles on transport by rail & air. In this article, we will discuss the goods transportation and GTA (Goods Transport Agency) and the provisions of GST applicable on them.
Goods
Transportation in India
The most popular form of goods transport in India is via
road. As per the National Highways Authority of India, about 65% of freight and
80% passenger traffic is carried by the roads. Transportation of goods by road
is done by transporter or courier agency. This article will discuss the
transporter, i.e, the GTA
What service of
transportation of goods is exempt under GST?
Services by way of transportation of goods are exempted:
Therefore, the service of transportation of goods by road
continues to be exempt even under the GST regime. GST is applicable only on
goods transport agencies, GTA.
What is a GTA?
As per Notification No. 11/2017-Central Tax (Rate) dated
28th June, 2017, “goods transport agency” or GTA means any person who provides
service in relation to transport of goods by road and issues consignment note,
by whatever name called. This means, while others might also hire out vehicles
for goods transportation, only those issuing a consignment note are considered
as a GTA. Thus, a consignment note is an essential condition to be considered
as a GTA.
What is a
consignment note?
A consignment note is a document issued by a goods transportation agency against the receipt of goods for the purpose of transporting the goods by road in a goods carriage. If a consignment note is not issued by the transporter, the service provider will not come within the ambit of the goods transport agency.
If a consignment note is issued, it means that the lien on the goods has been transferred to the transporter. Now the transporter is responsible for the goods till it’s safe delivery to the consignee.
A consignment note is serially numbered and contains –
Name of consignor
Name of consignee
Registration number of the goods carriage in which the goods are transported
Details of the goods
Place of origin
Place of destination.
Person liable to pay GST – consignor, consignee, or the GTA.
Services provided
by a GTA
The service includes not only the actual transportation of
goods, but other intermediate/ancillary service provided such as-
Loading/unloading
Situation under
Service Tax
RCM applied under the Service tax laws too. There was an abatement of 60% (40% taxable) for transportation of used household goods and 70% (30% taxable) for transportation of normal goods
|
Service by a GTA |
GST rate |
|
Carrying-agricultural produce, milk, salt and food grain including flour, pulses and rice, organic manure, newspaper or magazines registered with the Registrar of Newspapers, relief materials meant for victims of natural or man-made disasters, defence or military equipment |
0% |
|
Carrying- goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage is less than Rs. 1,500 |
0% |
|
Carrying- goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs. 750 |
0% |
|
Any other goods |
5% No ITC or 12% with ITC |
|
Used household goods for personal use |
0% |
|
Transporting goods of unregistered persons |
Earlier exempted, but later made taxable; currently, list yet to be notified |
|
Transporting goods of unregistered casual taxable persons |
Earlier exempted, but later made taxable; currently, list yet to be notified |
|
Transporting goods (GST paid by GTA) |
5% No ITC or 12% with ITC |
|
Transporting goods of 7 specified recipients |
Irrespective of GTA choosing 12% (with ITC) and 5% (without ITC), if the GTA opts for paying tax on forward charge by giving a yearly declaration^, then it appears in the tax invoice. If that declaration is not given, then GTA has chosen for the reverse charge where the recipient must deposit tax and ITC cannot be availed by the GTA. |
|
Hiring out vehicle to a GTA |
0% |
GTA liable to
register
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