Article clears Confusion related to Exemption from GST in following two circumstances-

-Goods, where consideration charged for the transportation of goods ON A CONSIGNMENT TRANSPORTED IN A SINGLE CARRIAGE does not exceed Rs.1500/-

-Goods, where consideration charged for transportation of ALL SUCH GOODS FOR A SINGLE CONSIGNEE does not exceed Rs.750/-

Extract of Notification No. 12/2017- Central Tax (Rate) Dated 28th June, 2017

Sr. No.

Chapter, Section, Heading, Group or  Service Code (Tariff) Description of Services  GST Rate

(%)

Condition 

21 Heading 9965 or Heading 9967 Services provided by a goods transport agency, by way of transport in a goods carriage of –
> Goods, where consideration charged for the transportation of goods ON A CONSIGNMENT TRANSPORTED IN A SINGLE CARRIAGE does not exceed Rs.1500/-

NIL

NIL

> Goods, where consideration charged for transportation of ALL SUCH GOODS FOR A SINGLE CONSIGNEE does not exceed Rs.750/-

NIL

NIL

FIRST CATEGORY-SINGLE CARRIAGE (RS.1500/-)

> The first situation is where consignments are transported in a single carriage and the total freight for the single carriage (multiple consignment notes or multiple consignee in a single carriage) does not exceed Rs. 1500/- in total.  In such case there is exemption from GST.

Examples

1. A company receives goods from a GTA in a truck. No other goods are loaded in that truck. The company pays freight of Rs. 1500/- to GTA. No GST is payable by any person on this consignment as it is exempted under first category.

2. A company receives goods from a GTA in a truck. Some other goods not belonging to the company are also loaded in the truck. The company pays freight of Rs. 800/- to GTA. The freight of other goods is Rs. 500/-. GST is not payable by the company on this consignment as the total freight for the truck is Rs. 1300 (not exceed 1500) so it is exempted.

  • Here in this case company should ask the GTA to certify that the gross amount charged on all the consignments in a goods carriage is less than Rs. 1500/-. In such a case, consignee will have proof for claiming exemption under the first category.

3. A company receives goods from a GTA in a truck. Some other goods not belonging to the company are also loaded in the truck. The company pays freight of Rs. 800/- to GTA and freight of other goods is Rs. 900/-; then the total freight for the truck is Rs. 1700 (exceed 1500). Freight paid by company is Rs. 800 (>750). So, exemption is not available and the company should pay GST on Rs. 800/-.

4. The problem arises only when the gross amount charged on the consignments in a goods carriage is less than Rs.1500/-, particularly when single consignee’s charges are more than Rs.750/-. Hence in a specific case where single consignee’s charges are more than Rs.750/- and the gross charges including all other consignments are less than Rs.1500/- , consignee has to ask the transporter to indicate the same in the bill.

SECOND CATEGORY-SINGLE CONSIGNEE (RS.750/-)

> The Second situation covers an “individual consignment” transported by a GTA for a particular single consignee.  In such a situation if the gross amount charged for transport of these goods is Rs. 750/- or less; then that consignment will be exempted from GST.  The limit of Rs. 750/- is with reference to each truck load carrier for a particular consignee.

Examples

1. A company receives goods from a GTA in a truck. The company pays freight of Rs. 700/- to GTA. No GST is payable by any person on this consignment as the value of consignment is less than Rs.750/- it is exempted under second category.

2. If suppose, two consignment note is issued by one GTA for single consignee; one is Rs.450/- and other consignment note is Rs.500/- for transportation in single carriage then in our specific view exemption is not available under second category.

ILLUSTRATIONS

Sr. No.

Case Study Single Consignment Amount (Rs.) Taxability

Category

1. Single Consignee & Single Carriage

600/-

No GST Second

1200/-

No GST

First

1800/- GST

2. Single/Multiple Consignee & Single Carriage (Total Single Carriage Exceed Rs.1500/-)

600/-

No GST

Second

1200/-

GST

No First

1800/-

GST

3. Single/Multiple Consignee & Single Carriage (Total Single Carriage does not exceed Rs.1500/-)

600/-

No GST

Second

1200/-

No GST

First

1800/-

GST

OLD REGIME CASE LAW (SERVICE TAX)

Scope of Exemption to G T A Service-Rs.750/- Per consignee and Rs.1500/-per consignment

(mad)-CCE vs. Suibramania Siva coop sugar Mills Ltd. (2014)52 taxmann.com 339

FACTS:

  • The assessee availed the services of goods transport agency in respect of transport of sugarcane into the factory and paid service tax on freight Inward that exceeded Rs.1500/- but did not pay service tax on the amount of freight that exceeded Rs 750/- but was below Rs.1500/-
  • The department contended that as per Notification No.34/2004-ST dated 03/12/2004, a limit of Rs.1500/- in the said notification applies only in respect of multiple consignments whereas in case of individual consignment, the said limit is only Rs.750/-
  • Tribunal decided in favour of the assessee.

HELD:

Explaining the scope of exemption, the High Court held that as is evident from the reading of the explanation, individual consignment covered in sub-clause (2) of the said exemption means all goods transported by goods transport agency for a  consignee

In contradistinction to this, fixing of exemption limit of Rs.1500/- under sub clause (1) is not limited to the consignment to the individual consignee but it refers to consignments relatable to more than one consignee.

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DISCLAIMER

  • The information cited in this article has been drawn from various provision of The CGST Act, Rules, provisions and other various sources. While every effort has been made to keep, the information cited in this article error free, team GSTCORNOR does not take the responsibility for any typographical or clerical error which may have crept in while compiling the information provided in this article.
  • This article includes general information about legal issues and developments in the law of GST in India. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this article to the fullest extent permitted by law. Do not act or refrain from acting upon this information without seeking professional legal counsel.

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