Multimodal Transportation under GST in India: Rules and Rates

Multimodal Transportation of Goods (MMT) refers to moving cargo under a single contract using at least two different modes of transport (e.g. road+rail, sea+road) . Under GST, a Multimodal Transport Operator (MTO) is defined as one who enters a contract to perform such multimodal carriage and “acts as principal, and not as agent… and assumes responsibility for performance of the contract” . In contrast, a Goods Transport Agency (GTA) is (by CGST notification) any person providing transport of goods by road who also issues a consignment note . In practice, issuance of a consignment note is sine qua non for GTA classification ; without it, a transporter is not considered a GTA and (under Notification 12/2017‑CT(Rate)) its services would instead fall under exemptions. Thus MTOs and GTAs are legally distinct: MTOs handle multi‐mode contracts (not limited to road) and act as principals, whereas GTAs are specifically road‐ transport service providers issuing consignment notes.

Legal Framework

GST law does not define “multimodal transportation” in the Act itself, but the concept was incorporated by Notification No.13/2018‑CT (Rate) dated 26.7.2018. This notification amended the CGST Rate schedule (and a corresponding IGST schedule) to insert a new item “(vi) Multimodal transportation of goods” (HSN 9965) at 6% CGST . Its accompanying Explanation defines “multimodal transportation” as carriage of goods by at least two different modes from the place of acceptance to delivery , and “multimodal transporter” as discussed above . For GST purposes, multimodal transport of goods is thus treated as a distinct service (HSN 9965) taxed at a flat rate. The CGST notification came into effect 27 July 2018 (with SGST/UTGST sides issued similarly) and applies to domestic MMT services.

Pplace-of-supply rules for transport services, including multimodal transport (MMT)

The place-of-supply rules for transport services, including multimodal transport (MMT), apply as follows:

• If both the supplier and the recipient are located in India, Section 12(8) of the IGST Act applies. This section provides that the place of supply is:

  • the location of the recipient, if the recipient is registered, or

  • the location where goods are handed over for transportation, if the recipient is unregistered.

• If either the supplier or the recipient is located outside India (i.e., in the case of imports or exports), the rules fall under Section 13 of the IGST Act.

  • Prior to 1 October 2023, Section 13(9) provided that the place of supply for goods transport services (excluding by mail or courier) was the destination of the goods.

  • However, Section 13(9) was omitted with effect from 1 October 2023 via the Finance Act, 2023. As a result, Section 13(2) now applies, and the place of supply is the location of the recipient of the service.

In summary:

• For domestic MMT services, the place of supply is governed by Section 12(8) — resulting in CGST + SGST if intra-State, or IGST if inter-State.

• For export MMT services (e.g., sea freight to a foreign port), the place of supply was earlier the destination of the goods (under Section 13(9)), but post-October 2023, it is now the location of the recipient (under Section 13(2)).

Notifications & Circulars: Apart from No.13/2018‑CT(Rate), other relevant notifications include:Notification 2/2018‑IGST(Rate) (exempting international freight on aircraft/vessel from India to outside, which can cover the export leg of an MMT). Crucially, the GST Council clarified (31st meeting, Dec 2018) that the 12% MMT rate applies only to domestic multi-modal transport . That is, MMT services between places in India attract 6% CGST + 6% SGST (12%), whereas purely export shipments (even if multimodal) fall under general IGST zero-rate rules. The Council’s press release expressly states that entry for “multi-modal transport with GST rate of 12%… covers only transport of goods from a place in India to another place in India, i.e. only domestic multi-modal transport” . For domestic MTOs, Circulars/FAQs have emphasized treating MMT like any other transport service and applying place-of-supply rules normally.

Tax Rates and Applicability

• Tax Rate: Multimodal transport service is taxed at 12% (6% CGST + 6% SGST) for intra-state movement and 12% IGST for inter-state/domestic movements . (Effectively it is a single composite rate of 12% on ) This replaced the earlier situation where different legs (road, rail, sea) were taxed at different rates. By contrast, a GTA (road carrier) has a special scheme: GST can be paid at 5% (2.5%+2.5%) without ITC or at 12% with ITC .
• Place of Supply: For domestic multimodal transport (MMT), where both the supplier and recipient are located in India, Section 12(8) of the IGST Act applies. If the recipient is registered, the place of supply is the location of the recipient; if unregistered, it is the location where the goods are handed over to the transporter. Accordingly, if the multimodal transport operator (MTO) and the consignee are in the same state, CGST and SGST are applicable; if they are in different states, IGST is charged. In cases where the destination of goods is outside India, the place of supply was earlier governed by Section 13(9), which treated the destination of goods (i.e., the foreign port) as the place of supply, effectively making such services zero-rated exports. However, since Section 13(9) was omitted with effect from 1 October 2023, the place of supply for international transport services is now determined under Section 13(2), i.e., the location of the recipient of the service. For comparison, goods transport agency (GTA) services are also subject to Section 12(8) when both supplier and recipient are within India.
• GST Applicability: A multimodal transport contract is considered a supply of service. GST is thus levied on the freight amount. The liability is on the MTO (as principal), not on the shipper (unless RCM applies in GTA but not MTO). Unlike GTA (where recipients may pay under reverse charge in some cases), MTO services are generally paid by the supplier. Also, whereas GTA services by unregistered individuals are exempt (Entry 18 of 12/2017‑CT(Rate)), MTO has no such exemption; any transport by an MTO (domestic) is taxable at 12%.
• Input Tax Credit (ITC): MTOs can claim ITC on inputs used for supplying the service, since the 12% rate option imposes no ITC (The CGST notification simply levies 6% each and does not bar ITC.) By contrast, under the GTA scheme, if the GTA opts for the concessional 5% rate, it cannot avail ITC on inputs used ; if it opts for standard 12% on GTA, full ITC is allowed. In short, an MTO has no limitation on input credits (normal chain of credit), whereas a GTA may lose ITC on input goods if using the lower rate.
• Invoicing and Documents: An MTO issues a tax invoice for the multimodal Unlike GTA services, there is no statutory consignment-note requirement for MTOs (GTA must issue consignment notes). However, MTOs should still maintain documentation of the contract and handover for tax and e-way compliance.
• E‑Way Bills: Rules for e-way bills apply to multimodal shipments. Notably, Notification 31/2019‑CT amended Rule 138 to explicitly require an e‑way bill for multimodal shipments involving sea transport. That amendment inserts “or multimodal shipment in which at least one leg involves transport by ship” into the list of movements needing e-way bills . In practice, any high-value domestic MMT movement (by road/rail/ship) must comply with normal e-way (GTA road shipments likewise require e-way if value exceeds thresholds, with no separate exceptions.)

Comparison: MTO vs. GTA

Exemptions and Rulings

Under GST, no specific exemption was granted solely for MTO services. The 12% GST rate entry (Notification 13/2018) does not carry an exemption. Thus domestic MTO services are fully taxable at 12%.

In contrast, Notification 12/2017‑CT(Rate) (the “mega‑exemption”) lists many GTA services as nil-rated. For instance, transport of agricultural produce, milk, salt, grains, newspapers, relief materials, defence cargo, and low‑value consignments are exempt from GST , but these apply only to GTAs, not MTOs. Likewise, the exemption in IGST Notification 2/2018 (on vessel/aircraft freight to outside India) can benefit a multimodal shipment that includes an export leg – but this is governed by general IGST export rules, not the MTO rate entry.

Crucially, GST Council clarifications confirm that the 12% MTO entry covers only domestic transportation. Shipments or service elements beyond India fall under normal IGST/export provisions (e.g. zero‑rating). Any guidance (e.g. GST Council FAQs) has stressed that MTO services should be treated like any other goods transport service for GST purposes: place-of-supply rules apply and any available export relief is governed by IGST notifications.

Judicial/Advance Rulings: There have been few specific rulings on domestic MMT in GST. Most precedents relate to GTA (consignment notes) or international freight. For example, it is well-settled (by CBIC FAQs and rulings) that if a transporter does not issue a consignment note, he cannot claim GTA status . But by contrast, an MTO need not issue consignment notes (since they are not GTAs). To date, no high-profile GST tribunal/SC judgments deal directly with MTO classification in the domestic context. Practitioners thus rely on the statutory definitions and GST Council clarifications .

In sum, domestic logistics companies offering multimodal transport must charge GST at 12% on MTO services, follow standard place-of-supply rules and can claim full ITC. They cannot invoke GTA exemptions under Notification 12/2017. (since those exemptions explicitly reference “services provided by a goods transport agency” ). In comparisons, while both MTO and GTA services are taxes on freight, the MTO service is treated as a unified transportation service and taxed at a flat rate with full input credit, whereas the GTA scheme involves a concessional rate with ITC restrictions. Logistics firms should carefully determine whether their contracts qualify as multimodal (single principal liable, two+ modes) or as regular road transport (GTA), since the tax treatment differs markedly.