Goods Transportation Agency under GST

In this article we will exclusively talk about Goods Transport Agency and provisions relating to it.

What is a Goods Transport Agency?

Any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

EXEMPTIONS - There are certain exemptions relating to GTAs as well which are services provided by a goods transport agency, by way of transport in a goods carriage of,-

·        agricultural produce;

·        goods, where gross amount charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees;

·        goods, where gross amount charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred 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’s;

TAX RATE - GST rate on Goods Transportation Agency is 5% but with no ITC available.

This means GTA will not be able to claim ITC of taxes paid to procure inputs or input services.

REVERSE CHARGE – Normally a GTA is to pay GST like a normal registered taxpayer. However if GTA provides the services to following persons, recipient of services is required to pay GST on reverse charge  –

1.    any factory registered under or governed by the Factories Act,1948;

2.    any society registered under the Societies 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;

4.    any person registered under CGST/SGST/UTGST Act;

5.    any body corporate established by or under any law; or

6.    any partnership firm whether registered or not under any law including association of persons;

7.    casual taxable person.

Thus, in what cases will GST be paid by GTA like a normal taxpayer?

·       Unregistered Sole Proprietors, HUF, BOI

·       Non Resident Taxable Person.

In these cases it is the Goods Transport Agency who will be liable to pay GST on forward charge basis.

Hence, to conclude it can be said that transportation expense incurred by

•      Any entity

•      Other than unregistered SP, HUF , BOI and Non Resident Taxable Person

•      On service provided by a GTA for transportation of goods by road

•      For consignment value exceeding Rs. 1500/- per consignment or Rs. 750/- per consignee

•      For goods transported

•      Other than agricultural produce, milk, salt and food grain , organic manure, newspaper or magazines, relief materials for natural calamities affected place, defense or military equipments

is subject to levy of GST on freight charges paid by the freight paying party on RCM basis.