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Introduction: The Goods and Services Tax (GST) regime continues the provisions from the Service Tax era, recognizing the critical role of the Goods Transport Agency (GTA) in the transportation of goods by road. Given the significance of GTA services in the logistics sector, it is essential to understand the GST implications, exemptions, and applicable rates that influence this domain. The classification of a GTA, the importance of issuing a consignment note, and the specific exemptions provided under GST law form the bedrock of tax obligations for GTA services. This article delves into these aspects, offering a comprehensive overview of the GST treatment of GTA services.


The GST law continues the provisions prevailing under the Service Tax regime. The law recognizes that pure transportation of goods services is mostly provided by persons in the unorganized sector and hence has specifically excluded such operators from the tax net. In respect of those who provide agency services in transport, the liability is cast on the recipients in most of the cases or unless option to pay under forward charge has been exercised by the GTA.

Before going to discuss GST implications, exemptions, rate etc,. on GTA services, let us understand who is called the GTA in the first place.

Who is “GTA”?

GTA[1] means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. A transporter who doesn’t give a consignment note but offers a challan or kaccha bill is called Goods Transport Operator (‘GTO’). The following needs consideration in this regard-

  1. service in relation to transport of goods;
  2. by road;
  3. issues consignment note, by whatever name called.

In relation to-

Here the word ‘in relation to’ has lot of significance and to be understood that any service which has a direct or indirect connect with a specified service has to be treated as ‘in relation to’ that specified service.

It includes not only the actual transportation of goods, but any intermediate/ancillary service provided in relation to such transportation, like loading/unloading, packing/unpacking, trans-shipment, temporary warehousing, etc. If these services are not provided as independent activities but are the means for successful provision of GTA Service, then they are also covered under GTA.

By road-

The transportation needs to be provided by the road itself.

Consignment note-

We have understood that consignment note has lot of significance however it is neither defined under GST nor in the GST notifications. Thereby guidance has been taken from the meaning ascribed to the term under the explanation to Rule 4B of Service Tax Rules, 1994, as per which consignment note should contain the following:

1. Serially numbered.

2. Name of the consignor and consignee.

3. Registration No of the Goods carriage in which goods are transported.

4. Details of the Goods sent.

5. Place of origin and place of Destination.

6. Person Liable to pay GST.

GST Implications for Goods Transport Agency (GTA) Services

Flyer[2] issued by CBIC dated 01-01-2018 has clarified that if a consignment note is issued, it indicates that the lien on the goods has been transferred (to the transporter) and the transporter becomes responsible for the goods till its safe delivery to the consignee.

It is only the services of such GTA, who assumes agency functions that is being brought into the GST net.

The question arises here what if the GTA did not issue consignment note. In that case if the document issued contains the particulars specified above, it still would be covered under GTA. The same was clarified by Hon’ble Supreme Court in the case of Commissioner v. Premier Tobacco Packers Pvt. Ltd[3].

Exemptions to GTA services under GST

The following entries are found relevant for GTA services on perusal of exemption notification No.12/2017- Central Tax (Rate) dated 28-06-2017. –

Entry No. Particulars Remarks
18 Services by way of transportation of goods-

By road except the services of-

A goods transportation agency;

1. A courier agency;

2. By inland waterways.

Transportation of goods are exempt by road except GTA & courier agency services.
21 Services provided by a GTA, by way of transport in a goods carriage of- agriculture produce;

1. milk, salt and food grain including flour, pulses and rice;

2. organic manure;

3. newspaper or magazines registered with the Registrar of Newspapers;

4. relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or

5. defence or military equipment.

GTA services for transporting these goods are only exempt.
21A Services provided by a GTA to an unregistered person (URD), including an unregistered casual taxable person (CTP), other than the following recipients, namely: –

1. any factory registered under/governed by the Factories Act, 1948; or

2. any society registered under the Societies Registration Act, 1860 or any other law for the time being in force in any part of India; or

3. any co-operative society established by or under any law for the time being in force; or

4. any body corporate established, by or under any law for the time being in force; or

5. any partnership firm whether registered or not under any law including association of persons;

6. any casual taxable person registered under the CGST Act/IGST Act/SGST Act/UGST Act.

Hence transportation services provided by GTA to URD/unregistered CTP are exempt.

If provided to these specified recipients, then it is taxable.

21B Services provided by a GTA, by way of transport of goods in a goods carriage, to,-

1. A Department or Establishment of the CG/SG/UT; or

2. Local Authority; or

3. Governmental agencies, which has taken registration under the CGST Act only for the purpose of deducting tax u/s 51 and not for making a taxable supply of goods/services.

GTA services provided to these recipients are also exempt.

Thereby transportation services provided by GTA other than services covered above are taxable.

Withdrawal of exemption in case of GTA services

Exemption has been withdrawn (w.e.f. 18-07-2022) on services provided by GTA in relation to transportation of goods in goods carriage, where consideration charged-

  • on a consignment transported in a single carriage not exceeding Rs.1500/-
  • for transportation of all such goods for a single consignee not exceeding Rs.750/-.

Value on which GST is to be paid?

Section 15(1) of the Act provides the value of supply of good/service to be the transaction value (price actually paid/payable) where the supplier and recipient are not related, and price is the sole consideration for the supply.

Further, if recipient incurs any cost but which is liable to be incurred by GTA and not included in the price charged by supplier, then such cost would be included in value of supply (as per section 15(2)(b) of the Act).

Generally recipient hires GTA for transportation services where price charged by the GTA would be the sum factoring transportation charges, cost of fuel, and other incidental charges incurred by GTA for providing such services.

Free supply of fuel by recipient to GTA

What if recipient of GTA services agreed to supply fuel to GTA on free of cost? Whether the cost of fuel is to be include in value of supply as per section 15(2)(b) of the Act?

In this regard, para 1 of circular No. 47/21/2018-GST dated 08-06-2018 is to be referred which clarifies that while calculating the value of the supply made by the Component Manufacturer (CM) to Original Equipment Manufacturers (OEM), the value of moulds and dies provided by the OEM to the CM on Free of Cost (FOC) basis shall not be added to the value of such supply because the cost of moulds/dies was not to be incurred by the CM and thus, does not merit inclusion in the value of supply in terms of section 15(2)(b) of the Act.

Based on above circular, the cost of fuel is not required to be included in value of supply.

However, a recent judgment by Chhattisgarh High Court in the case of M/s Shree Jeet Transport[4] has held diesel provided free of cost by the service recipient to the transporter providing GTA service be added to the value for the purpose of GST based on the following observations-

1. Even by agreement between the GTA and service recipient, this statutory liability cannot be sidelined by seeking to have the contract provide for recipient giving diesel FOC to GTA.

2. The value of service agreed to be provided necessarily will depend on the nature of service and the nature of business as without fuel the entire business of GTA cannot survive.

3. Since the transportation is dependent on supply of fuel, it would be a crucial component to run the business of GTA.

4. Therefore, the Circular No.47/21/2018-GST dated 8th June 2018 on which the petitioner tried to rely upon would not be of any help especially considering the nature of business and the provisions of Section 7(1)(a) and 15(2)(b) of CGST Act.

Rate of tax

The following table depicts the rate of tax applicable on GTA services along with mode of discharge of tax i.e., Forward Charge (FCM) and Reverse Charge (RCM).

(Entry 9 of rate notification No. 11/2017-Central Tax (Rate) dated 28-06-2017 read with entry 1 of RCM notification No. 13/2017- Central Tax (Rate) dated 28-06-2017)

Option exercise by GTA to itself pay GST on GTA services provided? Rate of tax RCM or FCM ITC eligibility to GTA
Not exercised 2.5 RCM Not eligible
Exercised 2.5 FCM Not eligible
6 FCM Eligible

Exercise of option by GTA

1. The option by GTA to pay itself (i.e., FCM) on the services supplied by it during a Financial Year (FY) shall be exercised by making a declaration in Annexure V on or before 15th March of the preceding FY.

2. Once GTA opts for RCM or FCM for a FY the same cannot be switched to FCM or RCM, declaration once filed cannot be withdrawn for that FY. And the declaration so furnished will be valid for one FY only.

3. If in case GTA fails to file, the declaration they will not be able to provide services under FCM.

Whether GTA is required to mention rate of tax in declaration?

1. The same is not clarified however, considering the specimen notified, GTA is not required to mention that the services will be provided at a 12% or 5% GST rate on the forward charge basis in the declaration.

2. GTA can also switch between the forward charge GST rates i.e., 12% and 5%, but the credit of input tax credit will have to be taken proportionately in that case.

Author’s suggestions: It is advised the procurement team of any registered person to check the option exercised by the GTA and then comply for liability, if any under reverse charge.

Classification of GTA services

Relevant changes have been made in CGST Notification (Rate) No. 11/2017 dated 28.06.2017. to avoid confusion in classification of GTA Service whether under HSN 9965 or 9967. Now, GTA services shall be classified under SAC 9965 only, whereas ‘Support services in transport’ shall be classified under SAC 9967.

An explanation has been inserted in SAC 9967 to clarify the same – “This entry does not include goods transport service involving Goods Transport Agency (GTA) service, which falls under Heading 9965’’.

It is now mandatory to follow HSN 9965 for GTA services and HSN 9967 no longer applies to GTA services and only to transport services taxable @18%.

ITC eligibility to GTA

As seen in table above, ITC is not eligible to GTA in the following two cases-

1. Where GTA did not opt to pay under FCM and

2. Where GTA opted to pay under FCM but IGST @5% (or CGST& SGST @2.5% each)

Explanation 4(iv) to the exemption notification No. 12/2017 ibid provides the following w.r.t. the ITC restriction to GTA-

1. credit of input tax charged on goods/services used exclusively in supplying such service has not been taken; and

2. credit of input tax charged on goods/services used partly for supplying such service and partly for effecting other supplies eligible for input tax credits, is reversed as if supply of such service is an exempt supply.

Let us understand the above with the following illustrations:

Case 1: ITC of Rs. 1,00,000/- was charged to GTA on goods & services procured for supplying GTA services. In this case, GTA is not eligible to take credit of Rs.1,00,000/-.

Case 2: Say GTA is also engaged in the sale of laptops (taxable and completely eligible for credit) and GTA services. ITC on common inputs procured for both the GTA services & laptops is Rs. 5,00,000/-. Turnover from GTA services and laptop sales is Rs.8,00,000/- and Rs. 10,00,000/- respectively. In such case, ITC attributable to GTA services is to be reversed considering GTA services as exempt supply for the purposes of ITC reversal, as follows:

ITC to be reversed = Rs. 2,22,222.22/- [i.e., Rs. 5,00,000*(8,00,000/ 18,00,000)]

Author’s suggestions: It is advised to maintain separate track of expenses when GTA is also engaged in other taxable supplies eligible to credit (otherwise ITC may need to be reversed more if GTA turnover exceeds other taxable turnover).

Who is recipient of GTA services?

Wherever GST under RCM is applicable on GTA services (as discussed earlier), recipient of GTA services is liable to pay GST under RCM. Here the question arises who would be called the recipient of GTA services as either the seller or buyer of goods will arrange for transportation.

Explanation (a) to the RCM notification No. 13/2017 ibid provides that the person (located in taxable territory) who pays or liable to pay freight for the transportation of goods shall be treated as the person who receives the service. Let us take the following cases (assuming GTA did not opt for FCM)-

1. If the consignor (being a specified person) pays freight to GTA then he will be treated as the recipient of GTA services, and liable to pay GST under RCM.

2. If the consignee (being a specified person) is liable or pays the freight payment then he will be treated as the recipient of GTA services, and liable to pay GST under RCM.

When tax is to be paid?

Time of Supply (ToS) provisions under law provides when tax is required to be paid.


Section 13(2) of the CGST Act, 2017 provides ToS for services liable to GST under FCM as earlier of a &b below-

1. earlier of-

1. date of invoice issued by GTA or

2. date of provision of service by GTA (if invoice is not issued before or after 30 days from date of supply of service) or

3. the date of receipt of payment by GTA (earlier of date of payment entry in GTA’s BoAs or date of credit in GTA’s bank account) or

2. date of expense entry in the recipient’s BoAs (if above clause do not apply).

Let us understand the above provision with the help of below illustrations.

Particulars Case 1 Case 2
Date of provision of GTA service (a) 25-01-2024 25-01-2024
Date of invoice issued by GTA (b) 22-02-2024 (within 30 days from 25-01-2024) 27-02-2024 (not within 30 days from 25-01-2024)
Date of receipt of payment by GTA (c) 26-01-2024 26-01-2024
ToS 26-01-2024

(earlier of b or c)


(earlier of a or c)

Generally, GTA issues invoice to the customer only when the “Proof the delivery” (POD) is submitted to the RCI by the driver who delivered the goods to customer. The date of POD can be considered as date of completion of service. In few circumstances there may delay in driver submitting the POD, this leads to delay in raising of invoice by GTA to the customer.


Section 13(3) of the CGST Act, 2017 provides time of supply for services liable to GST under RCM as earlier of a, b& c below-

1. earlier of-

1. date of payment entry in the recipient’s BoA or

2. date of debit for payment in recipient’s bank account; or

2. 61st day from the date of invoice issued by GTA; or

3. date of expense entry in the recipient’s BoA (if above two clauses do not apply).

Let us understand the above provision with the help of below illustrations.

Particulars Date
Date of payment entry in recipient’s BoAs (a) 25-01-2024
Date of debit for payment in recipient’s BoAs (b) 22-02-2024
Invoice date (c) 26-01-2024
61st day from invoice date (d) 27-03-2024
ToS 25-01-2024 (earlier of [earlier of a or b] or d)

Continuous supply of GTA services

Sometimes contracts would be entered between the GTA and recipient to provide transportation services over a period of time. In such cases, it is required to determine whether the same qualifies as continuous supply of services, as due date of issue of invoice is different for continuous supply of services. Section 2(33) of the CGST Act, 2017 provides continuous supply of services to mean as follows-

1. supply of services provided or agreed to be provided,

2. continuously or on recurrent basis, under a contract,

3. for a period exceeding 3 months

4. with periodic payment obligations.

Section 31(5) of the Act provides when invoice is to be issued for continuous supply of services. The same is depicted in the below table:

Particulars Invoice is to be issued on or before the following-
If due date of payment in the contract is- ascertainable due date of payment
not ascertainable date of receipt of payment by GTA
If payment is linked to the completion of an event. date of completion of the event

If GTA services qualify as continuous supply of services, then invoice is to be issued as per above provision and accordingly ‘when tax is to be paid’ is to be determined as per section 13(2) & 13(3) as discussed above.

Place of Supply (PoS)

PoS of services by way of transportation of goods is summarised as below-

Provision under IGST Act, 2017 Particulars Recipient’s status PoS
Section 12(8) Location of GTA and the recipient are located in India registered Location of recipient
URD Location at which such goods are handed over for their transportation
Section 13(9) Either location of GTA or recipient are located outside India Not applicable The destination of such goods

From above it is understood, determining the location of supplier is also utmost important to determine PoS.

What would be the location of supplier?

Here question arises as to what would be the location of supplier when service is being provided from multiple states registered under GST? The same can be understood with the following example where-

-Indent is raised by the customer to State A

-Consignment note is issued from State B

-Vehicle with which services are provided belongs to State C

-Invoice for the service provided is raised from State B

There is no specific provision to ascertain the location of supplier in the above situation.

It is suggested to ensure all the relevant documents such as agreement, consignment note, invoice., etc are executed from the billing state.

Documentation procedures for the recipient?

Generally, the documentation aspects (invoice, debit note & credit note etc.) have to be complied by the supplier of good/service. However, in the following cases, recipient of GTA services (when liable to GST under RCM) are required to issue the following documents:

Document type GTA supplier status When to be issued
Self-invoice unregistered on the date of receipt of GTA services
Payment voucher unregistered or registered at the time of making payment to the GTA supplier

GST registration of GTA

Further if GTA is solely engaged in transportation services and did not opt to pay itself, it is said to be exclusively engaged in services liable under RCM, hence GTA need not get registration[5].


Non-applicability of e-invoice to GTA supplier

In terms of Rule 48(4) read with CGST Notification No. 13/2020 dated 21.03.2020, GTA is exempted from complying with e-invoicing requirements even if their aggregate turnover in any of PY’s exceeds the prescribed threshold of issuing e-invoice [i.e. INR 5 Crores w.e.f. 01-08-2023].

Declaration on tax invoice

Rule 46 of CGST Rules, 2017 (amended vide CGST Notification No. 14/2022 dated 06-07-2022) provides that declaration is required to be added in tax Invoices being issued by the GTA for non-applicability of e-invoice on account of exemption provided in the Rule 48(4) of CGST Rules, 2017.

I/We hereby declare that though our aggregate turnover in any preceding financial year from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of rule 48, we are not required to prepare an invoice in terms of the provisions of the said sub-rule.” 

Hence, any GTA not required to issue e-invoice even having aggregate turnover exceeding the prescribed limit in any F.Y. 2017-18 onwards shall be required to mention the above declaration while issuing tax invoices to its customers.

Exemption on hiring of motor vehicle to GTA supplier.

Entry no.23 of exemption notification No. 12/2017 ibid provides exemption to inward supply of hiring of motor vehicle by GTA. Hence, if any GTA receives hiring of motor vehicle, no tax is to be charged by the supplier.

Pointers for Professionals

Audit/Compliance Perspective:

1. Understanding the status of the recipients by GTA: registered, unregistered, or specified.

2. GST registration requirement for GTA.

3. Rate of GST, FCM/RCM, and GST liability.

4. Credit aspects:

1. Proper computation/reversal of ITC as per Rule 42 and 43 for common credits.

2. Proper disclosure of eligible and ineligible credit in GSTR-3B

5. Option exercise by GTA for FCM.

Conclusion: Under the GST framework, GTA services hold a unique position with specific provisions tailored to address the intricacies of goods transportation by road. While the law exempts certain GTA services from the tax net, understanding the criteria for exemptions, the significance of consignment notes, and the conditions under which services become taxable is crucial for both service providers and recipients. The regulatory guidance on the valuation of services, particularly concerning the free supply of fuel and the role of consignment notes, underscores the complexity of tax liabilities in the transportation sector. As the GST landscape evolves, staying informed about these regulations will ensure compliance and efficient tax management for businesses engaged in goods transportation services.

[1] As per Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017

[2] Booklet, flyer and FAQ are issued for simple language and easy understanding, and they do not have force of law.

[3] 2018 (18) G.S.T.L. J38 (S.C.)

[4] WPT No.117 of 2022

[5] As per Notification No.5/2017


The views expressed are strictly personal and based on position of law prevailing as on date. This cannot be regarded as an opinion. For any queries or feedback please write to

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