Transportation is a huge part of the economy. Any problems in transportation disrupts the entire business channel. This is why any fuel price change has a far-reaching effect in disruption of business.

The most popular form of goods transport in India is via road. As per the National Highways Authority of India, about 65% of freight and 80% passenger traffic is carried by the roads.

Transportation of goods by road are done by transporter or courier agency. This article will discuss the transporter, i.e., the GTA or goods transport agencies and the provisions of GST applicable on them.


As per Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017, “goods transport agency” or GTA means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

This means, while others might also hire out vehicles for goods transportation, only those issuing a consignment note are considered as a GTA. As per Explanation to Rule 4B, Service Tax Rules, 1994, a consignment note is a document, issued by a goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage. The consignment note is serially numbered, and contains the names of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods, place of origin and destination, and person liable for paying service tax whether consignor, consignee or the GTA .

The courts held only persons issuing consignment notes are covered within GTA. So, individual truck owners who do not book cargo and issue consignment note in normal course of business are, not GTA and accordingly, services provided by them are not liable to service tax.

Goods Transport Agency under GST:

GST will not apply on transport of following goods by a goods transport agency-

1. agricultural produce

2. milk, salt and food grain including flour, pulses and rice

3. organic manure

4. newspaper or magazines registered with the Registrar of Newspapers

5. relief materials meant for victims of natural or man-made disasters

6. defence or military equipment

7. goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage is less than Rs. 1,500

8. goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs. 750.


Is a GTA Liable to register?

As per Notification No. 5/2017- Central Tax dated 19/06/2017, a person who is only engaged in making supplies of taxable goods/services, where the total tax on which is liable to be paid on reverse charge basis by the recipient as the category of persons exempted from obtaining registration under GST.

Thus, a GTA does not have to register under GST if he is exclusively transporting goods even if the turnover exceeds 20 lakhs as the total tax is required to be paid by the recipient under reverse charge basis

Place of Supply

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.

Reverse Charge in case of GTA

Normally a service provider is required to pay taxes, but in case a GTA provides the services to the following persons, recipient of services is required to pay GST under reverse charge (notification No. 13/2017- Central Tax (Rate) dated 28th June, 2017) :

1. Factory registered under the Factories Act,1948

2. A society registered under the Societies Registration Act, 1860 or under any other law

3. A co-operative society established under any law

4. A person registered under GST

5. A body corporate established by or under any law; or

6. A partnership firm whether registered or not (including AOP)

7. Casual taxable person

Who will pay under RCM?

As per Notification No. 13/2017- Central Tax dated 28/06/2017 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 receiver of service.

Payment is by sender

If the supplier of goods (consignor) pays the GTA, then the sender will be treated as the recipient. If he belongs to the category of persons above then he will pay GST on reverse charge basis.

Payment by Receiver

If the liability of freight payment lies with the receiver (Consignee), then the receiver of goods will be treated as a receiver of transportation services. If he belongs to any of the above category of persons, then he will pay GST on reverse charge basis.

Situations showing who is liable to pay GST in case of a GTA-


As per notification Notification No. 8/2017-Central Tax (Rate) dated 28th June 2017, intra- State supplies of goods or services or both received by a registered person from any supplier, who is not registered, is exempted from GST if it does not exceed Rs. 5,000 in a day.

If the transport charges are less than Rs. 5,000 per day then no GST will be payable.

Input Tax Credit ~~

**** GTA can opt for 12% GST with ITC or 5% GST with no ITC. However, the GTA has to give an option at the beginning of financial year.

Note:  Notification No. 11/2017 Central tax (Rate) dated 28.06.2017 &  GST Council 20th Meeting on 5th Aug 

The notification mentions that the restriction of ITC is only on goods or services used in supplying the GTA service.,i.e., they are referring the GTA itself.

In case of reverse charge, the person paying tax is the service recipient who is not supplying the GTA service so the concern of using any inputs to supply GTA service does not arise. He is liable to pay GST only because of RCM.

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Name: Ajayraj
Qualification: CA in Job / Business
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