Confusion of Rs. 750/- or Rs. 1500/- Under GTA in GST??

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 28^th June, 2017

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

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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