GST on goods Transported by road

Last Updated On: Aug. 21, 2020, 10:49 p.m.
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GST ON GOODS TRANSPORTED BY ROAD

All Transport services by road are exempted from GST except services from Goods Transport Agency (GTA) and Courier Agency.

What is Goods Transport Agency?

Goods transport agency means any person who provides service in relation to transport of goods by road and issues consignment note.

What is Courier Agency?

“Courier agency” means any person engaged in the door-to-door transportation of time-sensitive documents, goods or articles utilizing the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles.

 

Applicability of GST on Goods transported by road:

GST is applicable for Transportation of services by road except for Goods Transport Agency and Courier agency.

 

Rate of GST:

  • In case of services supplied by GTA on transportation of goods including used household goods for personal use the rate of GST is 5% (CGST-2.5%, SGST-2.5%), IGST-5%.
  • Input Tax credit is not available on GTA.

        Note: The Non-availment of ITC is applicable where GTA himself is liable to pay tax and not where the recipient is liable to pay GST under reverse charge.

        Once the recipient pays the tax on a reverse charge basis, then he can avail this input tax credit.

  • In case of Forward charge, an option to pay tax pay is @ 12%.
  • 12% GST rate on forward charge basis (ITC is available to transporter)
  • Services provided by GTA to an unregistered person is exempt except if he adopts to pay GST on forward charge basis
  • Services provided by GTA for agriculture product is exempt
  • If consideration charged for single consignment is less than 1500 RS. than service from GTA is exempt
  • If multiple consignments carried by transporter and consideration for a single consignee does not exceed Rs.750 than service from GTA is exempt.

 

Reverse charge in respect of GTA services:

As per Notification No. 13/2017-CT (Rates) and 10/2017-IT (Rates) both dated 28-6-2017, effective from 1-7-2017, In case of services of Goods Transport Agency (GTA), the service recipient is liable in most of the cases,  except where the GTA opts to pay tax under forward charge @ 12%.

The person who pays or is liable to pay the freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification.

 

Exemption to service provided by GTA to unregistered person (other than where a reverse charge applies):

In case of services supplied to unregistered person by GTA (other than where a reverse charge applies), the service is exempt w.e.f. 13-10-2017.

In case where service is provided by GTA to factory, society, company, partnership firm or registered person, the recipient is liable to pay tax.

Where GTA provides services to an unregistered person, service is exempt.

Thus, after 13-10-2017, the GTA itself is not liable to pay tax, except where the GTA opts to pay tax under forwarding charge @ 12% [6% plus 6%].

Till 13-10-2017, GTA was liable to pay GST in following cases –

  • when a recipient of service is an unregistered individual person
  • transportation of household goods when the freight is paid by an unregistered individual person
  • Services supplied to a person located outside the taxable territory (like transport to Bhutan, Nepal, Bangladesh)where the recipient is paying the freight.

What if the consignment note is not issued?

If the driver of goods carriage is self-employed either by taking a vehicle on rent from others or as an owner of one or two vehicles, he does not issue any consignment note. He has a direct contract with consignor/consignee. He himself receives freight from consignor/consignee. He would not be liable to GST. Only GTA which issues a consignment note is liable to GST tax.

Services provided by a goods transport agency, by way of transport in a goods carriage of following are exempt from GST –

  • agricultural produce
  • goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed Rs. 1,500
  • goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty
  • milk, salt and food grain including flour, pulses and rice
  • organic manure
  • newspaper or magazines registered with the Registrar of Newspapers
  • relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or
  • defence or military equipment
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