Goods Transport Agency under GST

Meaning:- GTA means any person who provides services in relation to transportation of goods by road and issue consignment note (builty) is a GTA.

Services by way of transportation of goods by road except the services of:-

-GTA

-COURIER

are exempt from GST vide ( E/N 12/2017 CT (R) dated 28/6/2017). So, it is clear that services by way of transportation of goods by road by GTA is taxable in GST.

Now there is another exemption to GTA’s which is if GTA provide services of transport in goods carriage of the following goods namely

1. Agriculture produce

2. Goods , where consideration charged for transportation of goods on a consignment transported in a single carriage does not exceed Rs. 1500/-

3. Goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs 750/-

4. Milk, salt, and food grain including flour, pulses and rice.

5. Organic manure

6. Newspaper or magazine registered with the registrar of newspaper

7. Relief material meant for victims of natural or man-made disaster, calamities, accidents or mishap or

8. Defence or military equipments

Further, if Goods Transport Agency under GST provides services by way of transportation of goods to any unregistered person than the services of GTA are exempt vide E/N/25/2017 CT (R) dated 28/6/2017.

So, the services of GTA will be taxable if it provides to the following person i.e.,

1) Any factory registered under or governed by factories act 1948 or,

2) Any society registered under the society registration act , 1860 or under any other law for the time being in force in any part of India

3) Any co-operative society established by or under any law for time being in force, or

4) Any body corporate established, by or under any law for time being in force, or

5) Any partnership firm whether registered or not under any law including association of person

6) Any casual taxable person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act.

Rate of Tax for Goods Transport Agency under GST

The Government has prescribed two rate of tax for GTA i.e.

(a) 5% (In case of Reverse Charge) – The rate of 5 percent is subject to the condition that service providers have not taken input tax credit (ITC) for the tax charged on the goods or services used in supplying the service.

(b) 12% (In case of Forward Charge)

Person liable to pay tax under GTA

The GTA has the option to pay tax under Forward Charge @ 12% or under Reverse Charge @ 5%.

If GTA opts to pay tax under Forward Charge then it is eligible to take the ITC, but if it opts to pay tax under Reverse Charge then it is not eligible to take the ITC.

The option to pay tax under either of the above stated mechanism will be opted at the beginning of the year and once the option exercise will remain applicable for whole of the year.

GTA under Reverse Charge Mechanism (RCM)

If GTA provide services in relation to transportation of goods to the following person located in taxable territory then there is an option to pay tax under RCM if recipient of such service is liable to pay freight.

1) Any factory registered under or governed by factories act 1948 or,

2) Any society registered under the society registration act , 1860 or under any other law for the time being in force in any part of India

3) Any co-operative society established by or under any law for time being in force, or

4) Any person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act. Or,

5) Any body corporate established, by or under any law for time being in force, or

6) Any partnership firm whether registered or not under any law including association of person

7) Any casual taxable person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act.