There are several confusions in mind of registered suppliers/recipient regarding registered/unregistered suppliers of “Transport Services” regarding rate of GST/RCM etc on Transportation of Goods when different rate items supplied in single Invoice. I have tried to sum up all concerning provisions at one place to explain provisions so during teething trouble we should have some relax of looking provisions described at different places in Act/Rules/Notifications:

1. Related Act/Rule at one place:

A.1 Charging Sections which allow to Include Transportation Cost in Invoice itself:

CGST Act, 2017 Under Section 2(30) “composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;

Illustration: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply.

CGST Act, 2017 Under Section 2 (74) “mixed supply” means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply;

 Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.

 CGST Act, 2017 Under Section 8. The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:—

(a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and

(b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax

CGST Act, 2017 Under Section 15(2) The value of supply shall include –

(c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services;

2. Rates Prescribed at different Notifications/Rate Books etc on Transportation different modes:

 B.1 Even GTA is exempted in certain following services where no RCM is applicable with or without monetary limit & Other rates–

## Reference Booklet issued by CBEC:


  • Entry No.19 – Services by way of transportation of goods-

                           (a) by road except the services of—

                                 (i) a goods transportation agency;

                                 (ii) a courier agency;

                     (b) by inland waterways

  • Entry No.22(c) if goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty;
  • Entry No.22(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;
  • Entry No.22 Other materials if transported by GTA will be exempted like news paper, agricultural produce, defense or military equipments, milk salt, food grain, including flour pulses etc
  • Entry No.23 Services by way of giving on hire – (b) to a goods transport agency, a means of transportation of goods.


Entry No.6,7, 8 Services of Rail, Vessel, goods transport agency (GTA) in relation to transportation of goods [including used household goods for personal use]


 Entry No.4 Transport of goods in containers by rail by any person other than Indian Railways

Reference Notification No.11 dated 28/06/2017:

At item No.9 heading 9965 under residuary clause (v) Transport other than – by Rail (5%), Vesel (5%), GTA (5%), by Rail container other than railway (12%) –  GST rate is 18%.

Problem wise analysis and suggestions:

  1. What should be rate of GST for transportation when different rate commodities supplied in single & same Invoice where any item cannot decide “Principal Supply”
  2. RCM when applicable – on registered or unregistered supplier – by surface or other means
  3. Rates of GST by different modes of transportation


Question 1 when different rate items supplied in a Single Invoice and having many items which will be dealt as “Principal Item”

Some Invoices I have seen where highest rate of GST applied as per commodity supplied in Invoice. This, I infer taken from section 8(b) concept of “Mixed Supply” so first question arises we have to dealt “Transport Cost” in bill is “Composite Supply” or “Mixed Supply”.

In any case it is not “Mixed Supply”, because these have not been offered or bundled by Supplier it is Purchaser who has ordered the items and items are sold in Single Invoice therefore applicability of section 8(b) is ruled out.

Now it is “Composite Supply” so rate is applicable with consonant to “Principal Supply”[as explained under section 2(30)]. Therefore as per Law rate of GST will be applied on other things like packing, handling, transport etc on the basis of rate applicable to “Principal Supply”.

To bring supply under “Composite Supply” following ingredients are must:

  • The supply should consist of two or more taxable supplies;
  • The supplies may be of goods or services or both;
  • The supplies should be naturally bundled;
  • They should be supplied in conjunction with each other in the ordinary course of business;
  • One of the supplies should be a principal supply (Principal supply means the predominant supply of goods or services of a composite supply and to which any other supply is ancillary).

The followings points should also be noted before confirming “Composite Supply”:

  • The way the supplies are bundled must be examined. Mere conjoint supply of two or more goods or services does not constitute composite supply.
  • The two (or more) supplies must appear natural when bundled and presented to the recipient.
  • The ancillary supply becomes necessary only because of the acceptance of the predominant supply.
  • The method of billing, assignment of separate prices etc. may not be relevant.
  • The tax treatment of a composite supply would be as applicable to the principal supply

Now Question arises, for example, if Grocery supplied 35 items from 0 to 28% or any other supply like in one tempo plywood, mica, fevicol etc are sent by single Invoice and at last packing/transport cost added then what rate of GST should be applied –  while Transport & packing is absolutely an essential component of supply. In such cases these supplies cannot be treated as “Composite Supply” because many items are “Principal Supply” which cannot decide GST rate for Transportation etc. and not necessary to supply all items naturally.

Answer: If it is possible and supplier is having proper software support then it can be proportionately charged and if bill is manual then it should pick highest rate of GST, it is safer side because recipient will get full ITC claim therefore this cost is not to be pained anybody.

Question 2 Applicability of RCM other than GTA as defined u/s9(3) and applicability of section 9(4) of CGST Act, 2017 in case of Transport cost – by surface or by other means?

As transport by surface is exempted except GTA no other mode of transport is covered under RCM therefore either Transport cost will be charged through Invoice or a separate bill will be raised by transporter. If transporter is registered and charged as per applicable rates as given at start of article then no issue you have to pay if as per terms you have to pay, otherwise “NO NEED TO PAY GST UNDER RCM ON SURFACE TRANSPORTATION COST AS IT IS EXEMPTED EVEN WHEN YOU RECEIVED SEPARATE BILL BY TRANSPORTER THEN SIMPLY PAY HIS CHARGES WITHOUT GST (WHETHER HE IS REGISTERED OR NOT)  EXCEPT WHERE TRANSPORTER IS GTA . NOTE EVEN ALONG WITH CERTAIN MONETARY LIMITS OR CERTAIN SUPPLIES WHERE GTA IS ALSO EXEMPTED AS EXPLAINED IN START OF ARTICLE.”

Question 3 Rates of GST in different modes of Transport:

Please refer starting of article where I have given, as possible as, applicable rates at a glance.

I hope this effort of keeping all points at one place will certainly help you all.


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  1. Puneet says:

    Sir, please explain the following point not discussed in your article.

    As per Point 9 of list of exempt services,transportation charged by the trader(freight) by raising a separate invoice is exempt ?

  2. rajivnigam says:

    Dear Mr Shah,

    Please refer entry No.23 at GST Rates on Services published by CBEC where it has been clearly mentioned that Services by way of giving on hire to a goods transport agency, a means of transportation of goods is subject to Nil tax.

    So in your question Mr B will pay only truck rent to Mr A and Mr A will neither charge rent nor Mr B will pay him or to Govt under RCM as it is exempted.

    Now Mr C will pay under RCM and Mr C will be only able to take ITC on his payables Mr B (GTA) has no role in GST.

  3. shainan shah says:

    i have 1 question regarding Good transport agency
    mr B is GTA Who is Taken truck on rent from Mr A. Mr B pay is rent to mr A as truck rent and also pay GST on truck rent. Mr B also supply goods to Mr c MR c pay freight and pay GST on That. Mr B how can charged gst paid by him from Mr C And Mr c Can take input tax credit GSt

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