In terms of Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 (Sr.no.18), the following services are exempt from GST
Services by way of transportation of goods (Heading 9965)-
(a) by road except the services of—
(i) a goods transportation agency;
(ii) a courier agency;
(b) by inland waterways.
Thus, it is to be seen that mere transportation of goods by road, unless it is a service rendered by a goods transportation agency, is exempt from GST.
As per Section 65B (26) of the Finance Act, 1994; “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”.
Under GST laws, the definition of Goods Transport Agency is provided in clause (ze) of notification no.12/2017-Central Tax (Rate) dated 28.06.2017.
(ze) “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;
Thus, it can be seen that issuance of a consignment note is the sine-qua-non for a supplier of service to be considered as a Goods Transport Agency. If a consignment note is issued, it indicates that the lien on the goods has been transferred (to the transporter) and the transporter becomes responsible for the goods till its safe delivery to the consignee.
Individual truck/tempo operators who do not issue any consignment note are not covered within the meaning of the term GTA. The services provided by such individual transporters who do not issue a consignment note are exempted vide entry at Sl. No.18 of notification no.12/2017-Central Tax (Rate).
As per Rule 4B of Service Tax Rules, 1994, consignment note means 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.
A consignment note is serially numbered and contains –
GTA Services-GST payable-related provisions:
Notification no. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification no. 20/2017-Central tax (Rate) dated 22.08.2017 Sl No. 9 reads :-
(i) Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use) (Heading 9965 &9967 respectively) attracts CGST RATE of 2.5% or 6% (Identical rate would be applicable for SGST), taking the effective rate to 5% or 12%.
Condition: As per Explanation to the notification
(a) credit of input tax charged on goods or services used exclusively in supplying such service has not been taken; and
(b) credit of input tax charged on goods or services used partly for supplying such service and partly for effecting other supplies eligible for input tax credits, is reversed as if supply of such service is an exempt supply and attracts provisions of sub-section (2) of section 17 of the Central Goods and Services Tax Act, 2017 and the rules made thereunder.
CGST @ 6% CGST (12% cumulative): Goods Transport Agency opting to pay central tax @ 6% under this entry shall, thenceforth, be liable to pay central tax @ 6% on all the services of GTA supplied by it with ITC facility.
It can be further interpreted that where the GTA is not eligible to take ITC for the supplies effected by it and the liability under GST is discharged under reverse charge basis, the recipient of GTA service discharging the tax liability is entitled to take Input Tax Credit (ITC) of the amount of tax paid under reverse charge, provided it is used in the course or furtherance of business at his end. Further the recipient would be eligible for ITC of the GST paid by GTA on forward charge basis.
Notification no. 11/2017-Central Tax (Rate), Sl.No.11 (ii) provides that supporting services in transport other than those mentioned in (i) (Heading 9967) would attract CGST @9% taking the effective rate to 18% including SGST. Similar rate has been prescribed for services falling under heading 9965 in terms of notification no. 11/2017-Central Tax (Rate), Sl.No. 9 (v).
Person liable to pay GST on GTA services:
Notification no. 13/2017-Central Tax (Rate) dated 28.06.2017 (Sl.No.1) as amended by Notification no. 22/2017-Central Tax (Rate) dated 22.08.2017 the recipients of services provided by a goods transport agency (GTA), if they are falling under any of the following categories, the recipient of subject services are liable to pay GST. [Where the GTAgency has not paid central tax at the rate of 6%, in respect of transportation of goods by road]
Note: 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.
(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) a 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.
Note: GST payable under Reverse Charge Mechanism on GTA shall be paid in cash only, however the same is available as credit under ITC.
Thus in cases where services of GTA are availed by the above categories of persons in the taxable territory the GTA supplier has the option to pay tax (and avail ITC) @12% (6% CGST + 6% SGST); and if the GTA does not avail this option, the liability to pay GST will fall on the recipients listed above. In all other cases where the recipients do not fall in the categories mentioned above, the liability will be on the supplier of GTA services. Is this conclusion correct ?. The readers to ponder over the issue.
Exemption from payment of GST on the GTA service provided in respect of following commodities:
Notification no.12/2017-Central Tax (Rate) dated 28.06.2017 (Sl.No..21): The following services provided by a GTA (Heading 9965 or 9967) is exempt from payment of tax.
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.
The following service received by the GTA (Heading 9966 or 9973) is also exempt in terms of Sl.No.22 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017
Services by way of giving on hire –
(b) to a goods transport agency, a means of transportation of goods.
If a motorised vehicle is given on hire to a Goods Transport Agency for transportation of goods by road, no GST is payable on such transactions.
The other services provided by a GTA: The service includes not only the actual transportation of goods, but other intermediate/ancillary service provided such as-
If these services are included and not provided as independent activities, then they are also covered under GTA.
Significance of the term ‘in relation to’ in the definition of GTA:
The use of the phrase ‘in relation to’ has extended the scope of the definition of GTA. It includes not only the actual transportation of goods, but any intermediate/ancillary service provided in relation to such transportation, like loading/unloading, packing/unpacking, trans-shipment, temporary warehousing, etc. If these services are not provided as independent activities but are the means for successful provision of GTA Service, then they are also covered under GTA.
|Service by a GTA||GST rate|
|Transport of goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage is less than Rs. 1,500/-||0%|
|Transport of goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs. 750/-||0%|
|Any other goods||5% with No ITC or
12% with ITC
|Used household goods for personal use [Not.No. 32/2017 CT(R)]||0%|
|Transporting goods of unregistered persons [Not.No. 32/2017 CT(R)]||0%|
|Transporting goods of unregistered casual taxable persons [Not.No. 32/2017 CT(R)]||0%|
|Transporting goods (GST paid by GTA)||5% with No ITC or
12% with ITC
|Transporting goods of 7 specified recipients||12% with ITC (paid by GTA) Or
RCM 5% with ITC
|Hiring out vehicle to a GTA||0%|
|GTA services to an unregistered person [Not.No. 32/2017 CT(R)]||0%|
Invoicing for GTA:
Any GST compliant invoice of a Goods Transport Agency must have following details-
1. Name of the consignor and the consignee
2. Registration number of goods carriage in which the goods are transported
3. Details of goods transported
4. Gross weight of the consignment
5. Details of place of origin and destination
6. GSTIN of the person liable for paying tax whether as consigner, consignee or goods transport agency
7. Name, address and GSTIN (if applicable) of the GTA
8. Tax invoice number (it must be generated consecutively and each tax invoice will have a unique number for that financial year)
9. Date of issue
10. Description of service
11. Taxable value of supply
12. Applicable rate of GST (Rates of CGST, SGST, IGST, UTGST and cess clearly mentioned)
13. Amount of tax (With breakup of amounts of CGST, SGST, IGST, UTGST and cess)
14. Whether GST is payable on reverse charge basis
15. Signature of the supplier
Place of Supply for a GTA: [As per Section 12 (8) of IGST Act, 2017]
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.