CBIC vide Notification No. 4/2022-CT(R) dated 13.07.2022 – Service by goods transport agency where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed Rs.1,500/- or where the consideration charged for transportation of all such goods for a single consignee does not exceed Rs.750/- has been made taxable w.e.f. 18.07.2022 by making an amendment in sr. no. 21 of Exemption Notification No. 12/2017-CT(R) dated 28.06.2017. Revised entry of Exemption Notification 12/2017-CT(R) is reproduced below:
| Sl. No. | Chapter, Section, Heading, Group or Service Code (Tariff) | Description of Services | Rate (%) | Condition |
| 21 | 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; […] |
Nil | Nil |
Also, vide Notification No. 05/2022-CT (Rate) dated 13.07.2022, following changes have been made to sr. no. 1 of reverse charge related Notification No. 13/2017-CT(Rate) dated 28.06.2017:
| Sl. No. | Category of Supply of Services | Supplier of service | Recipient of Service |
| 1 | Supply of Services by a goods transport agency (GTA) who has not paid central tax at the rate of 6%, in respect of transportation of goods by road to—
[…] Provided further that nothing contained in this entry shall apply where, – i. the supplier has taken registration under the CGST Act, 2017 and exercised the option to pay tax on the services of GTA in relation to transport of goods supplied by him under forward charge; and ii. the supplier has issued a tax invoice to the recipient charging Central Tax at the applicable rates and has made a declaration as prescribed in Annexure III on such invoice issued by him. |
No change | No change |
Vide Notification No. 03/2022- CT(R) entry with respect to services of Goods Transport Agency (GTA) has been amended in entry 9 of Notification No. 11/2017 – CT(R) dated 28.06.2017. Below is the summary of changes for your reference:
| GTA opts to pay under FCM | GTA does not opt to pay under FCM |
| Option 1: Pay GST @5%
Condition: The credit of input tax charged on goods and services used in supplying the service has not been taken Option 2: Pay GST @12% (Credit of input tax charged on goods and services used in supplying the service can be availed) |
GST to be paid by Recipient @5% such as:
a. Factory b. Society c. Co-operative society d. GST registered person e. Body Corporate f. Partnership Firm g. Registered Casual Taxable Person |
Notes:
1. The option by GTA to pay GST under FCM on the services supplied by it during a Financial Year shall be exercised by making a declaration in Annexure V on or before the 15th March of the preceding Financial Year. However, for the Financial Year 2022-2023 option shall be exercised on or before the 16th August 2022.
Our Comments:
1. Services provided by GTA to unregistered person, a Department or Establishment of the Central Government or State Government or Union territory or local authority or Governmental agencies taken GST registration for deducting TDS is still exempted.
2. No GST under RCM on Supply of Services by GTA where supplier has taken registration under the CGST Act, 2017 and exercised the option to pay tax on the services of GTA in relation to transport of goods supplied by him under forward charge; and the supplier has issued a tax invoice to the recipient charging Central Tax at the applicable rates and has made a declaration as prescribed in Annexure III on such invoice issued by him.
3. When the GTA pays the GST under FCM then the GTA should issue a tax invoice to the recipient charging GST at the applicable rates and GTA to make a declaration as prescribed in Annexure III on such invoice issued by him. Following declaration to be made on such invoice issued by the GTA:
“I/we have taken registration under the CGST Act, 2017 and have exercised the option to pay tax on services of GTA in relation to transport of goods supplied by us during the Financial Year _____ under forward charge.”.
4. Service recipient can avail ITC in relation to GTA Service, whether under forward charge or reverse charge.
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