Hello there, this Article is in continuation of my previous Article on GTA Services- GTA Services under GST Regime- Part 1

7. Can a Registered GTA apply for Composition Scheme?

Well, the simple answer to this question is NO. Sec. 10(2) of the CGST Act says:-

The registered person shall be eligible to opt for composition scheme, if:-

(a) he/she is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II (i.e. restaurant, catering, and other similar services)

Since, transportation of goods / passengers is a service provision; GTA is not eligible to opt for the scheme.

8. When Registration is not required?

Section 23(1) reads as follows :-

The following persons shall not be liable to registration, namely:––

(a) any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;

It means that if a GTA is engaged exclusively in transportation of goods mentioned in Table A (Exempt Goods) and Table C (Reverse Charge), then need it does not need to register itself in GST Regime.

If GTA is transporting other goods or consignment which are not covered in Table A or Table C, then GTA need to consider the provisions relating to Registration.

9. How Invoicing will be done?

There is “NO FORMAT PRESCRIBED” by the Government. Only a “FEW PARTICULARS” have been specified in the format. So every GTA is free to draft his/her own format for Invoicing under GST.

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Rule 54(3) of the CGST Rules says that in addition to the particulars stated in Rule 46 (Tax Invoice), a GTA has to mention following additional details in the Invoice :-

  • Gross Weight of the Consignment,
  • Name of the Consigner and the Consignee,
  • Registration No. of Vehicle in which the goods are transported,
  • Details of Goods Transported,
  • Details of Place of Origin and Destination,
  • GSTIN of the Person liable for paying tax whether as Consigner, Consignee or GTA.

These particulars will also apply to other Invoicing Formats specified in Rule 49-53 of the CGST Rules (i.e. Bill of Supply, Receipt Voucher, Refund Voucher, Payment Voucher, Revised Invoice and Debit / Credit Note).

10. Input Tax Credit

If the transporter charges GST @ 5% on Freight and Delivery Charges, then No Input Tax Credit will be allowed to the transporter while paying the taxes on such services, which restricts the flow of credit of taxes.

But whether Input Tax Credit can be availed when GST is paid on Reverse Charge Basis?

This question is most asked by the Tax Payers. After examining the various provisions of the GST Law, we came forward with following conclusions:-

Extracts of Section 9(3) & 9(4) :-

“ . . . and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.”

It implies that while paying tax under reverse charge basis, we cannot claim input tax credit of other inputs or input services. Therefore, one need to pay full GST @ 5% on value of services received without any tax credit.

Extracts of Section 17(5) :-

“ . . . input tax credit shall not be available in respect of following, namely:- (a) motor vehicles and other conveyances except when they are used . . . (ii) for transportation of goods; . . . ”

Section 17(5) specifies the list of blocked input tax credit. However, as per above text, Input tax credit can be availed on services of transportation of goods.

Therefore, once the tax has been paid by the recipient under reverse charge, he can avail the tax so paid as Input Tax Credit for payment of taxes on other output services provided by him/her.

11. E-Way Bill Provisions

The government has deferred these provisions and is hopeful to implement the same from Oct 1, 2017 onwards.

Till then, the movement of goods will be governed as per the old tax regime, i.e. Forms C, F, H, etc. will continue till the government introduces a new schema. However, the government has put into public portal the draft rules relating to E-way bills.

GSTR 3B Meaning

Highlights of the draft E-way Rules:-

  • These provisions can be ignored, if the value of Consignment is Rs. 50,000 or less in a single conveyance.
  • The E-way bill can be generated either by Consigner or Consignee or GTA.
  • These provisions will apply on every form of conveyance i.e. whether owned or rented or acquiring GTA services.
  • If the transporter carries two or more consignments in a single carriage, then he/she can generate a consolidated E-way Bill, specifying the serial numbers of all the E-way Bills generated for different consignments.
  • The validity of the generated E-way Bill will be as follows:-
Table – D (Validity of E-Way Bills)
S. No. Distance Validity period
1. 0 – 100 km 1 day
2. 100 – 300 km 3 days
3. 300 – 500 km 5 days
4. 500 – 1000 km 10 days
5. 1000 km or more 15 days

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9 responses to “GTA Services under GST Regime (Part 2)”

  1. Naveen says:

    Hi
    Forgot to inform that we already GST registered. Consignee and consigner are same since it’s import. Thank you.

  2. Naveen says:

    Hi Arpit
    I understood that GST registration is not mandatory for GTA, hope am correct. We do transport services from Chennai to Bangalore for client, they import and clear at Chennai by their agent later we are moving containers to their factory at Bangalore. We are billing only freight cost under Bill of supply with condition that “GST to be paid by recipient under GST RCM i.e. by client” Is it correct what we are following, pl do suggest.

  3. VIPIN says:

    Sir, Transporter GTA is Registered in GST. Consiner and Consinee both are registered in gst. all service is under RCM and Recipients paid GST. No GST charged on Freight by Transporter. now queery is in part of Transporter which Freight received by GTA now called is Exempt Supply,Nil/0 Rate Supply, Non GST Supply.

    • amg92 says:

      Hi Vipin, Supplies which are liable to tax under Reverse Charge, will be treated as Exempt Supplies on part of the transporter. Also, Aggregate Turnover includes value of Exempt Supplies.

  4. Nikhil says:

    Hi Arpit,
    The article is really very useful.
    Can you please suggest the Reverse Charge Rate of GST on GTA Services.
    Regards,

  5. P.Sampath Kumar says:

    In the case of Export Sales, now as per GST, we can get Duty Drawback for the next 3 months and we can’t claim CGST and IGST?
    Pl advise on this issue.

  6. P.Sampath Kumar says:

    Normally we are buying Diesel for our Unit from Cochin against ‘C’ Form.
    Now they are telling that the same is continuing and Invoice will be raised against ‘C’ Form. And they are also asking us to provide Bank Guarantee for the tax amount if the amount govt is allowing to issue ‘C’ Form. Pl advise on this.

    • amg92 says:

      Products like Petrol, Diesel, LPG etc… have been kept out of GST Regime. Old State VAT and their provisions will continue to be levied on these products.

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