GST on GTA Services- Complete Guide

The Supplier has to be a Goods Transport Agency and

As per clause (ze) of notification no.12/2017-Central Tax (Rate) of Central Goods and Services Tax Act 2017 dated 28.06.2017.

“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;

The term consignment note has neither been defined in the CGST Act nor in the notification under this act but meaning can be drawn from the explanation to rule 4B of the Service Tax Rules, 1994 the term Consignment note has been explained as “consignment note” means a document, issued by a transport of goods against the receipt of goods for the purpose of transport of goods in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency.”

So in the light of the above it can be concluded that the transporter shall be called a GOODS TRANSPORT AGENCY (GTA) only if it transports goods by road and issues a consignment note.

Applicable Tax Rate and availability of Input Tax Credit

Where the GTA is rendering service to person other than specified recipient who are required to pay tax under reverse charge, the tax shall be payable by the GST Service Provider either at the rate of

5% – Provided that input tax credit as charged on goods and services used in supplying the GTA service has not been taken by the GTA service provider.

Or

12% – Provided that credit of input tax charged on goods and services used in supplying the service has been taken by the GTA and, thenceforth, GTA shall be liable to pay tax at 12% on all the services of GTA supplied by it.

At the option of the service provider. If the option to pay tax at 12% has been opted by the GTA then conditions of reverse charge shall not apply, and GTA would be only liable to pay tax in forward charge.

Yes , where GTA who has not paid tax at the rate of 12 % and is rendering GTA services to any of the following recipient –

• any factory registered under or governed by the Factories Act, 1948(63 of 1948);

• any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;

• any co-operative society established by or under any law;

• any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act;

• any body corporate established, by or under any law;

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

• any casual taxable person

the liability to pay tax shall be that of the recipient of services at the rate of 5%. The credit of tax paid under shall be available to service recipient if the service is used in the course of furtherance of business.

Further the person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of applicability of reverse charge

• agricultural produce;

• goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees;

• goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty;

• milk, salt and food grain including flour, pulses and rice;

• organic manure;

• newspaper or magazines registered with the Registrar of Newspapers;

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

• Defense or military equipments.

• the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under i.e. 30 days from completion of service

or

the date of receipt of payment, whichever is earlier;

OR

• the date of provision of service(if the invoice is not issued within 30 days of completion of service)

or

the date of receipt of payment, whichever is earlier;

OR

• the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of either of the above clause do not apply

Where tax is payable by recipient of GTA service under reverse charge

the time of supply shall be the earlier of the following dates, namely:

• the date of payment as entered in the books of account of the recipient

or

the date on which the payment is debited in his bank account, whichever is earlier;

OR

• the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the GTA service provider

• Provided that where it is not possible to determine the time of supply as per above stated causes, the time of supply shall be the date of entry in the books of account of the recipient of supply

• Where the location of Supplier and location of Recipient is in India

o Be the location of registered person if services are rendered to a registered person

o Be the location where goods are handed over for transportation is services are rendered to a unregistered person

• Where either the location of Supplier or the location of Recipient is in outside India

o Be the place of destination of goods