GST

Goods Transport Agency under GST- Meaning, Services, GST Rate and Place

Goods Transport Agency under GST is one of the section under which many searches have appeared. Today in this blog will shower some light on Goods transport agency like what is Goods Transport agency (GTA) under GST, who is liable, what is the rate of GST on Goods Transport Agency any many more.

About 65% of the freight and 80% of the passenger traffic is carried through the help of roads. The most popular form of transport in India is passing through road. And as we know, the transportation of the goods by road is in the hand of the courier or GTA

So, the very first question which needed to be answered is what is Goods Transport Agency under GST?

What is the Goods Transport Agency under GST?

GST on Goods Transport Agency means any person who is carrying any activity related to the transport of goods by road and issues consignment note. However, it is often misunderstood by the vehicles that are hired out for goods transportation but only those who are issued under consignment note are to be considered as GTA.

There are certain services of transportation of goods that are exempt under GST which are as described-

By road except the following–

• a good transportation agency
• A courier agency

By inland waterways

GST is only applicable to goods transport agency, wherever the services of transport of goods by road will continue to be exempt even under the GST Regime. Consignment note plays a very important role in GTA.

Therefore, what is Consignment note under the GST on Transport Agency?

Consignment note under GST on Goods Transport Agency (GTA) means a document that is issued by the agency against the receipt of goods for the purpose of transporting the goods by road in a good carriage.  If in case, the consignment note is not issued by the Transporter, the service provider will not come under the GTA.

The format of Consignment note is as follows-

• Name of consignee
• Name of Consignor
• Detail of the goods
• Registration number of the goods carriage in which the goods are transported
• Place of Origin
• Place of destination
• And the person liable to pay the GST- Consignor, Consignee or the GTA.

Now , wiping the dust from the basics of Transport Agency, the next thing which comes under the Goods Transport Agency is the services that are provided-

Services under Goods Transport Agency

The following are the services that come under the GTA –

• Loading/unloading
• Packing/unpacking
• Tran-shipment
• Temporary warehousing etc

However, any service that is included and not provided as the independent activities it shall come under the purview of Goods Transport Agency.

GST rate under Goods Transport Agency

Services offered by Goods Transport Agency	GST Rate
Carrying- 1.       Organic nature 2.       Milk, salt and food grain included flour, pulses, and rice 3.       Agriculture Produce 4.       Defense or military equipment 5.       Victims of natural or man-made disasters 6.       Newspaper or magazine registered with the Registrar of Newspaper	0%
Carrying – Goods, where price is charged for the transportation of goods on a consignment transported in a single carriage, is less than Rs 1500	0%
Carrying- Goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs. 750	0%
Any other goods	5% No ITC OR 12% with ITC
Used Household goods for personal use	0%
Transporting goods for the unregistered person	0%
Transporting goods of unregistered casual persons	0%
Transporting Goods	5% 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 the vehicle to a GTA	0%

Is GTA liable under GST Registration?

There exists lots of confusion whether a Goods Transport Agency has to register under GST registration. A person engaged in the supplies of taxable goods or service on which the reverse mechanism charge applied is usually exempted from obtaining GST registration.

Who pays GST under RCM while hiring a GTA?

If a Goods Transport Agencies offers services to certain businesses, recipient of services then he is required to pay the GST under the reverse charge mechanism.

Forex- Mohan hired a Transport Agency to transport its goods, the consideration charged was around 1300. Now, Mohan is not liable to pay the GST under RCM as the consideration for transportation of the goods in a single carriage is less than Rs 1500.

Goods Transport Agency under Reverse Charge Mechanism

The following are the business is required to pay the GST under Reverse Charge Mechanism –

1. Factory registered under the Factories Act, 1948^[1]
2. A GST Registered Person
3. A co-operative society established under any law
4. A society registered under Societies Registration Act, 1860
5. A body corporate established by or under any law,
6. Partnership firm
7. Casual taxable person

However, a person liable to pay or paid the freight for the transportation of goods by road in goods carriage that is located in the taxable territory shall be treated as the receiver of service. The following are the cases where the payment of the GST is determined-

1. Payment by sender

If the consignor or supplier pays to the GTA then the sender will be treated as the recipient. If it belongs to the category of persons then he will be liable to pay the GST on reverse charge.

2. Payment by Receiver

If the liability of the freight payment lies in the hand of the receiver, then the receiver of the goods will be treated as the receiver of transportation service and the person belong with to it will pay the GST on a reverse charge basis lastly.

In addition to, the interstate supplies of goods or services or both received from an unregistered supplier or by a registered person registered person is exempted from GST if it does not exceed Rs 5,000 in a day.

Input Tax Credit under GTA 

There are two options available if GTA pays GST-

12% GST with Input tax credit or 5% GST with no ITC

However, the GTA has to be opting at the beginning of the financial year.

Payment of Tax by GTA

A Goods Transport Agencies cannot avail any of the ITC benefits on the inputs. So, payment of tax will be only through cash in normal modes of card/net banking/cash.

Returns to be filed by GTA 

If the services fall under the Reverse Charge Mechanism then a GTA are not required to register. In other words,  If GTA registers, then it has to file the 3 monthly GST Returns that are –

GSTR-1(sales)

GSTR-2(purchases- no ITC available) and

GSTR-3(monthly summary and tax liability)

Place of Supply under Goods Transport Agency (GTA)

1. A registered person shall be in the location of such person
2. A person other than a registered person shall be the location at which goods are handed over for their transportation.

Hence, the above said are the factors including mail or courier to determine the place of supply of services by way of transportation of goods for the GTA.

Read our article:How to Calculate GST Payments and Refunds in India