Before starting our discussion on Goods Transport Agency (GTA), Let’s first understand that who is a GTA under GST. Well, the answer to this question is given in Para 2 of N/NO. 12/2017 CT(R) and N/NO. 9/2017 IT(R) dated 28/6/2017, and as per the above said notification GTA means any person who provides services in relation to transportation of goods by road and issue consignment note (builty) is a GTA.

The analysis of the above stated definition of GTA brings out one important point that only providing services in relation to transportation of goods is not a GTA. It must also issue a consignment note (builty) to qualify a GTA

After reading the above Para one question must arise in your mind i.e., why it is important to understand that who is a GTA? So, friends it is important to understand because services by way of transportation of goods by road except the services of:-

  • GTA
  • COURIER

Are exempt from GST vide (entry no.  18 of E/N 12/2017 CT (R) dated 28/6/2017). So, it is clear that services by way of transportation of goods by road by GTA is taxable in GST

Now there is another exemption to GTA’s which is if GTA provide services of transport in goods carriage of the following goods namely

1. Agriculture produce

2. Goods , where consideration charged for transportation of goods on a consignment transported in a single carriage does not exceed Rs. 1500/-

3. Goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs 750/-

4. Milk, salt, and food grain including flour, pulses and rice.

5. Organic manure

6. Newspaper or magazine registered with the registrar of newspaper

7. Relief material meant for victims of natural or man-made disaster, calamities, accidents or mishap or

8. Defence or military equipments

After reading the above stated paragraph it seems that the transportation of following goods by GTA are exempt (entry no. 21 of E/N 12/2017 CT (R) dated 28/6/2017)

Further, if Goods Transport Agency under GST provides services by way of transportation of goods to any unregistered person than the services of GTA are exempt Entry no. 21A of E/N/25/2017 CT (R) dated 28/6/2017.

Now, the question arises that when the services of GTA will be taxable. So, the services of GTA will be taxable if it provides to the following person i.e.,

1) Any factory registered under or governed by factories act 1948 or,

2) Any society registered under the society registration act , 1860 or under any other law for the time being in force in any part of India

3) Any co-operative society established by or under any law for time being in force, or

4) Any body corporate established, by or under any law for time being in force, or

5) Any partnership firm whether registered or not under any law including association of person

6) Any casual taxable person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act.

Rate of Tax for Goods Transport Agency under GST

The Government has prescribed two rate of tax for GTA i.e.

(a) 5% (In case of Reverse Charge) – The rate of 5 percent is subject to the condition that service providers have not taken input tax credit (ITC) for the tax charged on the goods or services used in supplying the service.

(b) 12% (In case of Forward Charge)

Person liable to pay tax under GTA

The GTA has the option to pay tax under Forward Charge @ 12% or under Reverse Charge @ 5%.

If GTA opts to pay tax under Forward Charge then it is eligible to take the ITC, but if it opts to pay tax under Reverse Charge then it is not eligible to take the ITC.

The option to pay tax under either of the above stated mechanism will be opted at the beginning of the year and once the option exercise will remain applicable for whole of the year.

Law related to GTA under Reverse Charge Mechanism (RCM)

( Section 9(3) of CGST ACT, 2017 read with N.No 13/2017 dated 28.06.2017.

As per S.No 1 of the above stated notification if GTA provide services in relation to transportation of goods to the following person located in taxable territory then there is an option to pay tax under RCM if recipient of such service is liable to pay freight.

1) Any factory registered under or governed by factories act 1948 or,

2) Any society registered under the society registration act , 1860 or under any other law for the time being in force in any part of India

3) Any co-operative society established by or under any law for time being in force, or

4) Any person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act. Or,

5) Any body corporate established, by or under any law for time being in force, or

6) Any partnership firm whether registered or not under any law including association of person

7) Any casual taxable person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act.

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13 Comments

  1. PUSHKAR CHAND says:

    Dear sir,
    i am consingnor send material to customer by tranporation (GTA) and freight is paid by me. transporter is registered but is not reporting in his return my GST no. is reporting the GST no. of customer where he left the material. while the we are paying freight charge. in that case what should we do ?

  2. AGRO EXIM says:

    we are sending material (Agro Inputs) through local tempo, rixa, van to dealers, farmers etc. These service provider unregistered and not fixed. Freight charges are from Rs.150 to 7000. depending upon weight and destination.
    Is it applicable RCM?
    Please advise.
    Regards,
    Pravin Rana

  3. Mohit says:

    Sir I want to know what is the procedure for the filling of GST returns of GTA. In which para of GSTR1 or 3b he has to file. And another question is …can GTA claim input on capital goods such as GST paid on purchase of lorry or truck?

  4. Christopher Raja says:

    Dear Pulkit Sogani, Can you please explain me the concept of Reverse Charges @ 5% and Forward Charge @ 12 Concept elaborately if possible with reference to laws & rules.

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