Services by a Goods transport agency is always been a matter of dispute in earlier laws and in GST, provisions of GTA are scattered in various provisions and notifications. So I have tried in this article to consolidate almost all provisions of GTA. These provisions and notifications are as here under-
Tax ability on services of Goods Transport Agency–
Normally tax rate is 5% (2.5% CGST, 2.5% SGST and if interstate transaction IGST 5 %). There are few cases, where tax rate is nil. Mostly Services of GTA are covered in reverse charge but there are few cases where GTA will charge GST on forward basis. Details provisions are as follows-
Tax Rate on GTA as per notification 11/2017 Central Tax Rate, June 28, 2017
Heading 9967
(Goods transport services)
(iii) Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use).
CGST Rate 2.5%
Explanation.- “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.
Provided that credit of input tax charged on goods and services used in supplying the service has not been taken.
But credit will be available to recipient who will pay tax on reverse charge basis.
As sec 2 (62) – Input tax includes tax paid under reverse charge.
Tax Rate nil as per Notification No. 12/2017- Central Tax (Rate) Dated 28/06/2017
Heading 9965 or Heading 9967
Services provided by a goods transport agency, by way of transport in a goods carriage of –
(a) agricultural produce;
(b) 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;
(c) goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty;
(d) milk, salt and food grain including flour, pulses and rice;
(e) organic manure;
(f) newspaper or magazines registered with the Registrar of Newspapers;
(g) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or
(h) defence or military equipments.
Tax Rate- Nil
(d) “agricultural produce” means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market;
In case of agriculture produce loading, unloading and storage is also exempt.
Heading 9966 or Heading 9973
Services by way of giving on hire –
(a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or
(b) to a goods transport agency, a means of transportation of goods.
Tax Rate- Nil
Reverse Charges on GTA as per Notification No. 13/2017- Central Tax (Rate) Dated: 28/06/2017
In respect of under mentioned recipient, these recipients will pay tax on reverse charge basis-
| (a) Any factory registered under or governed by the Factories Act, 1948(63 of 1948); or
(b) 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; or (c) any co-operative society established by or under any law; or (d) 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; or
(e) any body corporate established, by or under any law; or (f) any partnership firm whether registered or not under any law including association of persons; or (g) any casual taxable person; located in the taxable territory. |
Registration is not required to GTA when all services are taxable under reverse charge basis –Notification No. 5/2017 – Central Tax dated: 19/06/2017
G.S.R. (E).- In exercise of the powers conferred by sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby specifies the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the said Act as the category of persons exempted from obtaining registration under the aforesaid Act.
2. This notification shall come into force on the 22nd day of June, 2017.
Where all the services of GTA is not taxable on reverse charge basis as GTA provides services to individual for personal purpose, GTA is required to obtain registration if liable as per provision of Section 22 &24 of CGST Act, 2017 and will charge GST on forward basis.
Invoice & Documents
Section 31 (3)
Clause (f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both;
Clause (g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier.
So if the GTA is not registered – Recipient will issue an invoice and issue a payment voucher.
If GTA is registered – GTA will raise Tax Invoice in the manner provided in rule 54 of CGST Rule,2017 and recipient will issue a payment voucher.
Rule 54 of CGST Rule,2017 Tax invoice in special cases
Sub rule (3) Where the supplier of taxable service is a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage, the said supplier shall issue a tax invoice or any other document in lieu thereof, by whatever name called, containing the gross weight of the consignment, name of the consigner and the consignee, registration number of goods carriage in which the goods are transported, details of goods transported, details of place of origin and destination, Goods and Services Tax Identification Number of the person liable for paying tax whether as consigner, consignee or goods transport agency, and also containing other information as mentioned under rule 46.
Place of Supply
Section 12 of IGST Act, 2017
Sub Section (8) The place of supply of services by way of transportation of goods, including by mail or courier to,––
(a) a registered person, shall be the location of such person;
(b) a person other than a registered person, shall be the location at which such
goods are handed over for their transportation
Example- Mr. A registered in Delhi book a transport company of Delhi to deliver goods to Mr. B registered in Rajasthan.
Place of Supplier (Transport Company)- Delhi
Place of Supply- Delhi i.e. place of Mr. A who is registered person
So this supply is intra state supply and will attract CGST and IGST and Mr. A will deposit tax on reverse charge basis.
Suppose in above transaction Mr. B is liable to pay freight then place of supply will be location of Mr. B. (Rajasthan) and this transaction will be interstate transaction. Now Mr.B will deposit IGST on reverse charge basis
Author can be reached at akgupta487@gmail.com, Mobile No. 9461869517)
Author Bio
Reverse charge mechanism is applicable only to receiver and not on supplier . Here A book the goods through GTA and B, registered dealer, is receiver and the supplier is liable to pay GST only on paid waybill. If it is “to pay way bill” it should be IGSt, payble by B, on reverse charge mechanism as the receiver is registered in Rajastan. (location of registered person)