GST Impact on Freight

GST IMPACT ON FREIGHT

In this article, we are going to discuss about the impact of GST on freight. As we already know that goods are transported through the three medium i.e. by road, air and sea, so we can categorised freight as Road freight, Sea Freight and Air Freight.

In this article we will only discuss about goods transported by road.

• The followings means of transportation are exempt from GST:

1. Goods transported by road are exempted except :

a) GTA

b) Courier Agency

c) Goods transported by Inland waterways

• What is GTA :

GTA is any person who provides services in relation to transportation of goods and issues consignment note, by whatever name called.

Consignment note can be a copy of GR or any other document etc. which contain consignee and consigner name, details of goods, registration no. of vehicle.

• Followings services provided by GTA are subject to GST: 

1. GTA services provided to any registered person including registered casual taxable person are liable to GST.

2. GTA services provided to followings person, even if unregistered person are liable to GST :

a) Factory

b) Society

c) Body Corporate

d) Co-operative society

e) Partnership firm including AOP

• Mode of Discharging GST liability: 

a) If GTA opts to pay GST @ 12%, liability to pay GST would be on GTA.

b) If GTA opts to pay GST @ 5%, liability to pay GST would be on recipient and recipient eligible to take the ITC.  (As per section 9(3) of CGST Act.)

**Where GTA opts to pay @ 5%, GTA would not be eligible for taking the ITC on goods and services used in supplying GTA services.

** Where GTA opts to pay @ 12%, that in this case there is no restriction on availing ITC on goods and services used in supplying GTA services by GTA.

• Followings services provided by GTA are exempted: 

1. GTA services provided to an *unregistered person (other than those mentioned above)

2. GTA services provided for agriculture produces, relief material, milk, food grain. Newspaper, military equipment, single carriage does not exceed 1500 and single consignee 750.

3. GTA services provide to Gov./local authority.

*Unregistered end consumer