Goods Transport Agency under GST with RCM Perspective

Introduction

Goods Transport Agency means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. Individual truck/tempo operators who do not issue any consignment note are not covered within the meaning of the term GTA.

What is a consignment Note

Consignment note is a document, issued by goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered and contains the name of consignor and consignee, registration number of the goods carriage in which the goods are transported, details of goods transported, details of place of origin and destination, person liable for paying tax whether consignor or consignee.

What is the rate of GST on GTA Service’s

Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use) attracts GST @12% IGST.

• However, the rate of 5% in place of 12% may be charged subject to the condition that credit of input tax charged on goods or services used in supplying the service has not been taken.

Services by way of giving on hire to a goods transport agency, a means of transportation of goods, is exempt in terms of notification no.12/2017- Central Tax (Rate) dated 28.06.2017

Name of services provided by GTA

GTA 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

In view of this, if any intermediary and ancillary service is provided in relation to transportation of goods by road, and charges, if any, for such services are included in the invoice issued by the GTA, such service would form part of the GTA service and would not be treated as a separate supply.

Name of Services of transport of goods exempted under GST

In term of notification no.12/2017- Central Tax (Rate) dated 28.06.2017 (sr. no. 18), the following services are exempted from GST-

Service by way of transportation of goods (Heading 9965):

• By road except the service of:
• A goods transportation agency;
• A courier agency
• By inland waterways.

Person liable to pay GST on GTA Services

The liability to pay GST devolves on the recipients ( under RCM @ 5%) for supply of services by a goods transport agency (GTA)who has not paid integrated tax at the rate of 12%, in respect of transportation of goods by road, if the recipient belong to the following category:

• Factory registered under the Factories Act 1948,
• A Society Registered under the Societies Registration Act, 1860
• A Co-operative society established under any law.
• A Person registered under CGST, IGST or SGST.
• Any body corporate established by or under any law;
• Any partnership firm
• Any casual taxable person.

GTA Services specifically exempt

As per notification no.12/2017- Central Tax (Rate) dated 28.06.2017, services provided by a GTA, by way of transport in a goods carriage of:

• Agriculture produce
• Relief material, defence or military equipments.
• Vide Notification No. 04/2022-CT (Rate) dt. 13.07.2022 the value-based exemption where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed Rs. 1500/- or where consideration charged for transportation of all such goods for a single consignee does not exceed Rs. 750/- have been omitted w.e.f. 18.07.2022. Hence the tax shall be payable in such situations.