GST Rules/ Regulations For Goods Transport Agency- At A Glance

CA Anita Bhadra

INTRODUCTION:- Goods Transport Agency has not been defined in GST Act. However, notifications related to provisions regarding GTA services have been issued by Central Tax 2017 on various dates. An attempt has been made to compile these notifications in one place & simplify the provisions  of GTA services in GST regime.

1. GTA (GOODS TRANSPORT AGENCY)GTA ( Goods Transport Agency ) means any  person who provides services in relation to transportation of goods by ROAD and issues CONSIGNMENT NOTE. ( Notification No. 11/2017 of Central Tax (Rate) date 28 June 2017.)

2. CONSIGNMENT NOTE :- The consignment note is a serially numbered document issued by a good transport agency (GTA) against receipt of goods for transportation. It contains following details

(a) Name of consignor & consignee

(b) Registration No. of the goods carriage (vehicle) in which the goods are transported

(c) Details of goods

(d) Place of origin & destination

(e) Person liable for paying GST ( Consignor , consignee or the GTA)

3. LIABILITY TO PAY GST

The Recipient of services is required to pay GST under Reverse Charge Mechanism (Notification No. 13/2017 date 28 June 2017 is relevant) for  services provided by GTA to  following category of  person:-

(a) Factory registered under the Factories Act 1948.

(b) A Society registered under the Societies Registration Act 1860 or under any other law.

(c) A Co operative society established under any other law.

(d) A Body Corporate  by or established under any law

(e) A partnership firm (Registered or Unregistered)

(f) Casual taxable person  payer

(g) A person registered under GST

Note:- GTA is liable to pay GST for services provided  to an individual or unregistered person only. For all 7 categories  stated in Para 3 above, liability to pay GST is lies with the recipient of transportation of goods & services.

4. RECIPIENT OF SERVICES  

(a) The person who pays or is liable to pay freight for transportation of goods by road will be treated as the recipient of service. (Central Tax Notification 13/2017 is relevant ).

(b) Supplier (consignor) of the goods will be treated as recipient of services if he is liable to pay freight..If Supplier belongs to the category of persons stated in Para 3 above, then he will pay GST on Reverse Charge Basis.

(c) Receiver r (consignee) of the goods  will be treated as recipient of services if he is liable to pay freight. If Receiver  belongs to the category of persons stated in Para 3 above, then he will pay GST on Reverse Charge Basis.

5. LIABILITY TO PAY FREIGHT

(a) Consigner (sender of the goods) is liable to pay freight  for goods transported on CIF basis (CIF is a trade term that mean the seller must pay the cost needed (cost of Insurance+ Freight) to transport goods to a destination).

(b) Consignee (Receiver of the goods) is liable to pay freight transported on FOB basis .It means buyer pays the cost of Freight, Insurance, Uploading and Transportation from the sender place to the final destination .

6. GTA’S LIABILITY TO REGISTERED UNDER GST

(a) A GTA does not  have to register under GST if he is exclusively transporting goods to the person as indicated at Para 3 above. (Notification no. 13/2017 is relevant ) even if the aggregate turnover exceeds 20 lakh threshold limit .

(b) As per Notification 05/2017- Central Tax dated 19/06/2017, a person is exempted from registration in GST if he is exclusively  engaged in making supplies of taxable goods/services where the total tax  is liable to be paid  by the recipient on RCM basis.

(c) However, if GTA is also providing services to unregistered dealer in addition to the person  specified vide notification 13/2017, he is liable to register if his aggregate turnover exceeds Rs. 20 lakh (even if aggregate turnover consists of only Rs 2 Lakh from unregistered and balance ie Rs. 19 Lakhs from Notified person)

7. DETERMINATION OF TAX FOR GTA SERVICES

(a) Intra State:- If location of supplier & place of supply  are in same States, the services provided will be considered as Intra sales and CGST + SGST will  be levied.

(b) Inter State:- If location of supplier and place of supply are  in different States , services will be considered as Inter State and IGST will be levied.

8. PLACE OF SUPPLY(POS)

(a) GTA provides services to  a registered Person– POS will be the location of such registered person.

(b) GTA provides services to unregistered person– POS will be the location at which  goods are handed over for  transportation

(c ) Indicative Examples:-

POS AND GST LIABILITY ASSUMING GTA IS MUMBAI BASED

10. GST RATES & ITC AVALIABLE :-

(a) Tax rate 5 %- GTA services to notified person under specified category indicated at Para 3 above. Tax will be paid by service receivable. ITC available. for recipient

(b) GTA can opt 5 % GST without availing or 12% GST  ITC available. However , he has to exercise the option  at the beginning of the financial year .

(c) Notification No. 11/2017 Central Tax (Rate) date 8 .06. 2017  & council 20^th meeting on 20^th Aug 2017 mentions that non availability of ITC by opting 5 % GST is only on Goods & services used in supplying the GTA services.

This restriction is not applied to the person paying tax under Reverse Charge Mechanism. So GST paid on GTA under RCM can ve availed as ITC by the person paying tax.

  11. EXEMPTIONS

GST will not applied on  transport of following  goods by GTA :-

(a) Agriculture produce

(b) Milk, Salt, food grain, pulses & Rice

(c) Organic manure

(d) Newspaper or magazines registered with Registrar of newspaper

(e) Relief material meant for victims of natural or man made disasters

(f) Defence or Millitary equipment

(g) Goods where consideration charges for single carriage is less than Rs. 1500/-

(h) Goods where consideration for all the goods for single consignee is less than Rs. 750/-

12. GST RETURNS BY GTA

Registered GTA is required to file 3 monthly Returns- GSTR1, GSTR2 and GSTR 3 .

CONCLUSION:- An attempt has been made to bring out all applicable facets of GST in respect of GTA in easy to understand manner and at a glance . The governing notifications and liabilities of payment of GST by GTA or by the recipient of Services under various condition of Supply.

The above will hopefully serve the business community in general as a ready recknor and as ERIC (Easy Reference if Consulted) .

Any further queries , clarifications – assistance can be given to those who seek. The same may be  e mailed to 1706 anita @ gmail. Com