Goods Transport Agency under GST : Applicability of GST on Goods Transport Agencies (GTA) :Transportation of goods by road are done by transporter or courier agency.
However entry no.18 of Notification No. 12/2017 central tax (rate) which notifies the services which are exempted from CGST Act reads as follows
Services by way of transportation of goods
(a) By road except the services of
(i) a goods transportation agency; (ii) a courier agency;
(b) By inland waterways.
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Analysis of the notification:
The effect of the above notification is as follows

1. Goods transporting services provided by transporter to registered or unregistered will not attract GST as the same is mentioned in the notification.
2. Transportation services provided by GTA or Courier agency only will attract GST as the same is specifically excluded from exemption.

Example1:
Speedy way transporters (not GTA) provided goods transportation services to Ram and co. Here GST will not be applicable because services by way of transportation of goods by road is exempt.
Example2:
Speedy way transporters (GTA) provided goods transportation services to Ram and co. Here GST will be applicable because services by way of transportation of goods by GTA is not in the exemption list.

Who is GTA
As per entry 9(iii) of Notification No. 11/2017 central tax (rate)
GTA means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.
Analysis1 of the notification:
Not only the actual transportation of goods, but other intermediate/ancillary service provided such as-

1. Loading/ Unloading
2. Packing/ Unpacking
3. Trans-shipment
4. Temporary warehousing etc.

will also form part of services provided by GTA if not provided as independent activities.
Analysis 2 of the notification:

1. For any transporter to be considered as GTA issuing of consignment note is necessary.
2. Consignment note distinguishes Goods transportation agency from a normal transporter.

Example 3:
Speedy way transporters (SWT) provided goods transportation services to Ram and co without issuing any consignment note. There will be no GST because SWT is not treated as GTA because it didnt issued any consignment note.
Example 4:
Speedy way transporters (SWT) provided goods transportation services to Ram and co and issued a consignment note. GST will be applicable because SWT is GTA as it issued consignment note.

What is consignment note
As per rule 4B of service tax rules, 1994,
Consignment note means a document, issued by a transporter against the receipt of goods for the purpose of transport of goods by road in a goods carriage,

1. which is serially numbered,
2. Contains the name of the consignor and consignee,
3. Registration number of the goods carriage in which the goods are transported,
4. Details of the goods transported,
5. Details of the place of origin and destination,
6. Person liable for paying service tax whether consignor, Consignee or the goods transport agency.

Rate of GST on GTA:
Some of the services provided by GTA are exempted while others are taxable.
Exempted category:
As per entry no. 21 of Notification No. 12/2017- Central tax (rate),
Services provided by a GTA by way of transport in a goods carriage of

1. agricultural produce;
2. 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;
3. goods, where gross amount charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred fifty;
4. milk, salt and food grain including flour, pulses and rice;
5. organic manure
6. relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or
7. defence or military equipments

are exempted.
Analysis of the notification:
The effect of the above notification is as follows

1. Not all services provided by GTA are taxable.
2. GST will not be levied if GTA transports any of the above mentioned goods within the said limits(if any)

Example 5:

Here consideration charged for single consignee exceeded Rs.750. However Gross amount charged for transportation in single carriage didnt exceed Rs.1500. Therefore GST is not leviable.
Example 6:

Here gross amount charged for all the consignments exceed Rs. 1500/-, the entire service is not exempt. However, exemption in respect of individual consignments may be claimed if the freight for individual consignment does not exceed 750/-. Hence services provided to consignee would be liable to GST.
Taxable category:
With respect to taxable services provided by GTA, it has the following 2 options:

1. 5% GST with no ITC
2. 12% GST with ITC(liable to pay 12% tax on all the services of GTA supplied by it)

It means if GTA wants to take credit of GST paid by him then he should collect 12% GST on all the services of GTA supplied by it. Alternatively he can collect 5% GST from his customers provided that credit of input tax charged on goods and services used in supplying the service has not been taken.
However in both of the above cases recipient can avail the credit of tax paid by him.

Who is liable to pay GST
In general GST has to be paid by service provider. However entry 1 of Notification No. 13/2017 central tax (Rate) notifies specific categories of supply of services on which tax has to be paid by recipient on reverse charge basis.

For the purpose of the above notification
The person who pays or is liable to pay 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

As per entry 21A of Notification No. 32/2017 central tax (rate), Services provided by GTA to an unregistered person including an unregistered casual taxable person are exempted.
Analysis of the notification:

1. Whenever a service is provided by GTA, it is very essential to find who is receiver of the service.
2. If the receiver falls under any of the above mentioned 7 recipients then GST should be paid by that recipient.
3. If GTA service is provided to unregistered person or unregistered casual taxable person, GST will not be levied, even if GTA is registered.

Example 7:
Ram and co (registered dealer) sold goods worth Rs. 40,000 to a customer (Unregistered). On the request of customer Ram and co delivered goods to his house by using service of speedy way Transporters (GTA). It is agreed between Ram and co and customer that the freight should be paid by Ram and co. In this case Ram and co will become receiver as the freight is paid by them. As he falls in the one of the 7 recipients (registered under GST), GST will be paid by Ram and co under reverse charge mechanism.
However if freight charges are paid by customer then GST will not be levied because service is provided to Unregistered person.

Registration of GTA under GST:
Every supplier will be liable to be register under GST act from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds Rs. 20 lakhs.
However as per Notification No. 5/2017- Central Tax dated, a person who is engaged in making only supplies of taxable goods/services on whichreverse charge applies is exempted from obtaining registration under GST.
It means If GTA provides services only to those 7 recipients who are liable to pay tax under reverse charge then GTA is not required to register under GST act.

Place of supply of GTA services:
As per CGST Act, the place of supply of services by way of transportation of goods, including by mail or courier to,

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

Example8:
Ram and co (registered person in Chennai) hired speedy way transporters (registered in Delhi) to deliver some goods from Delhi to Chennai. As the recipient is registered person the place of supply is the location of Ram and co i.e. Tamilnadu. (IGST will be applicable)
Example9:
Ram and co of Chennai (unregistered person) hired speedy way transporters (registered in Delhi) to deliver some goods from Delhi to Chennai which were purchased by Ram and co from a registered dealer in Delhi. As the recipient is unregistered person the place of supply is the location at which such goods are handed over for their transportation. It means the place of supply is Delhi (CGST and SGST will be applicable)
(However it is to be noted that in the above example, GST will not apply as the recipient is unregistered)
Time of supply of GTA services:
There are separate Time of supply provisions for Forward charge and reverse charge under GST.
1 . Time of supply of GTA in case of Forward charge:
TOS shall be the earliest of following dates

1. If the invoice is issued within 3o days of provision of service, the date of issue of invoice by the supplier or the date of receipt of payment whichever is earlier
2. If the invoice is not issued within 3o days of provision of service, the date of provision of service or the date of receipt of payment whichever is earlier
3. Date on which recipient shows the receipt of services in his books of account, in case where provision of clause(a) or (b) do not apply.

2. Time of supply of GTA in case of Reverse charge:
TOS shall be the earliest of following dates

1. The date of payment in the books of accounts of recipient or date of debit in his bank account whichever is earlier.
2. The date immediately following 60 days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier.
3. Where it is not possible to determine TOS as per clause (a) or (b), the TOS shall be the date of entry in the books of account of the recipient of supply.

Example 10:
Speedy way transporters who charges 12% GST on services provided by them provided GTA services to Ram and co (registered under GST) on 14-04-2018. Invoice issued on 24-4-2018. Payment made by Ram and co on the next day of issuing invoice.
The following points are to be considered here:

1. Who is recipient If recipient is a registered person then RCM applies. However GTA is charging 12% rate, it implies that RCM wont apply.
2. As it is a forward charge transaction, TOS provisions in case of Forward charge shall apply.

Considering the above points, Time of supply is earlier of 24-04-2018 or 25-04-2018(because invoice is raised before 30 days of provision of service). Therefore TOS is 24-04-2018.
Example 11:
Speedy way transporters provided GTA services to Ram and co (Unregistered partnership firm) on 14-4-2018. Invoice raised on 15-4-2018. However payment was made by Ram and co on 14-6-2018.
The following points are to be considered here:

1. Recipient is unregistered partnership firm. It means RCM applies.
2. As it is a Reverse charge transaction, TOS provisions in case of Reverse charge shall apply.

As per the provisions, TOS is 13-06-2018.
Invoicing in case of GTA:
Apart from the particulars which are to be included in Tax invoice, the following particulars should be mandatorily present in an invoice or on any other document issued by GTA.
Mandatory particulars:

1. Gross weight of the consignment
2. Name of the consignor and consignee
3. Registration number of the goods carriage in which goods are transported
4. Details of goods transported
5. Details of place of origin and destination
6. GSTIN of the person liable to pay tax whether as consignor, consignee or GTA

Returns to be filed:
In case GTA is registered then it has to file 3monthly returns. They are as follows

1. GSTR-1
2. GSTR-2
3. GSTR-3

Conclusion:
Keeping in view that the transportation services are very necessary for smooth going of business, only services provided by GTA and courier agency are brought into tax net in GST.
About the Author : This article has been written byJ.Prudhvi. The author can be reached at[email protected].

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