Goods Transport Agency under GST regime

What is a Goods Transport Agency (GTA)

As per explanation given in Notification no. 11/2017 dated 28.06.2017, "Goods Transport Agency"  means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. (Note :  Individual truck owners who do not book cargo and issue consignment note in normal course of business are not  considered as Goods Transport Agency.It can be understood as  issuing of consignment note is must for transportation of goods to be qualified as GTA services.)

What is a consignment note

It is a document which is issued when goods are received by a GTA(Goods Transport Agency) for the purpose of transport of goods by road in a goods carriage. Consignment note should be serially numbered.  Contents of consignment note are :

• Name of the consignor
• Name of the consignee
• Registration no. of vehicle ( in which goods will be transported)
• Details of goods
• Place of origin
• Place of destination

What is the SAC code for GTA

SAC code for Goods transport agency will be  996511. This service comes under  Distributive Trade Services, Accommodation, Food & Beverage Service, Transport Services, Gas & Electricity Distribution Services (Section no. 6) the group name - Land Transport Services Of Goods(Group No. 99651) and the heading name for the same is Goods Transport Services (Heading No. 9965). Description of services given under SAC code 996511 is road transport services of Goods including letters, parcels, live animals, household & office furniture, containers etc by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles.

What are the contents of invoice/tax invoice prepared by GTA  

A goods transport agency will have to issue tax invoice only in cases where tax is to be paid by  GTA themselves. Otherwise GTA will have to only issue invoice(not tax invoice) as tax will be paid recepient of service on reverse charge basis. As per Rule 54 of CGST Rules 2017: Tax invoice in special cases i.e where the supplier of taxable service is a GTA providing services in relation to transportation of goods by road in a goods carriage shall contain the following details in tax invoice along with other information as mentioned in rule 46 of CGST Rules 2017.

REVISED GST RATE FOR RENT A CAB | GOODS TRANSPORT AGENCY (GTA)

Details of GTA in tax invoice 

1. Name of GTA
2. Registered Address of GTA
3. Billing address of GTA if it is different then registered address
4. Permanent account number of GTA
5. GSTIN Of GTA if any
6. Contact details like : phone no. and email address, website if any
7. Tax Invoice No.(It must be serially numbered and each invoice will have unique number for that financial year)
8. Invoice date
9. SAC code & description of service
10. Authorized signatory with the GTA seal(at the end in the invoice)

Details of recepient

1. Name  of recepient (billed to)
2. Address of recepient
3. State and state code of recepient
4. GSTIN/UIN of the recepient (if any)

Details for transportation (freight) charges

1. Name of the consignee
2. GSTIN/UIN of consignee
3. Registration no. of vehicle ( in which goods will be transported)
4. Details of goods transported
5. Taxable value of supply
6. Details of place of origin & destination (including state)
7. Gross weight of the consignment
8. Rate of freight based on weight & destination & total freight charged
9. GSTIN/UIN of the person liable for paying tax whether as consignor, consignee or GTA
10. Whether GST is payable on reverse charge basis

What are the rules for GTA in reference to maintenance of books of accounts ans records

As per section 35 (2) of CGST Act 2017,Every owner or operator of warehouse/ godown or any other place used for storage of goods and every transporter, irrespective of whether he is a registered person or not, shall maintain records of the consignor, consignee and other relevant details of the goods in such manner as may be prescribed. As per Rule 58 (4) of CGST Rules 2017, Subject to the provisions of rule 56, Any person engaged in the business of transporting goods(GTA) shall maintain records of goods transported, delivered and goods stored in transit by him along with the GSTIN of the registered consignor and consignee for each of his branches.

Is Goods transport Agency exempt from registration under GST

Yes, if a GTA is exclusively engaged in business of transportation of taxable goods and the total tax thereon is required to be paid by the recipient of service under the reverse charge mechanism basis. Turnover of GTA is irrelevant in the above scenario(GTA services only to registered recipients). As per notification 5/2017 dated 19th June, 2017, Central Government has exempted  the category of persons from obtaining registration under the GST Act who are only engaged in  making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the said Act. It must be noted that if a GTA provides services to unregistered recepient and the total turnover (turnover from both registered as well as unregistered recipient) exceeds the threshold limit of Rs. 20 lakhs then GTA needs to obtain registration. So in my view, it is advisable for Goods Transport agency to obtain GST registration in order to do business with both registered as well as unregistered persons.

Under what circumstances GST will not be charged for GTA services

Under the following circumstances GST will not be applicable/charged for transportation of goods by availing services of  GTA :

• Goods transported are agricultural produce, milk, salt, 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, defense or military equipment.
• If the consideration charged for transportation charges(freight) to a single consignee does not exceed Rs. 750/- for all the goods transported.
• If the consideration charged for transportation charges(freight) of a consignment in a single carriage does not exceed Rs. 1500/- .
• If the consideration charged for transportation charges(freight) does not exceed Rs. 5000/- per day for intra state supplies of goods or services or both to a registered person by a supplier (whether registered or not). (vide notification no. 8/2017-dated 28th June 2017).

Is GTA  responsible to file GST returns

No, in case if the total turnover (even if that exceeds threshold limit) of GTA is derived from providing transportation services to registered persons under reverse charge mechanism basis. (In that case GTA is not required to register under the GST law so the question for return does not arise). However, if GTA has taken registration or provides transportation services to unregistered persons  and exceeds the threshold limit then three monthly returns need to be filed. GSTR -1 (for outward supplies/sales), GSTR -2 (for purchases) and GSTR -3 (monthly summary & tax liability).

What GST rate will be applicable to GTA

• The only rate applicable to GTA for providing services of transportation of goods by road (including used household goods for personal use) is 5%. (This will also be applicable only when the liability to pay tax comes on GTA,otherwise in most of the cases tax will be paid by recepient of service provided by GTA on RCM basis)
• GTA is not allowed to avail any credit of input taxes paid by them or charged to them for any goods or services used by them for providing transportation services.

Will GTA get any input tax credit

No, A Goods transport Agency will not be eligible for any input tax credit for the taxes paid. So, whatever liability arises needs to be discharged through any of the payment options allowed under the GST law. Don't get confused : But it does not mean that GST paid on services of GTA by a supplier of goods or by a recepient  of goods under the reverse charge mechanism can not be claimed by the person(supplier/recepient) paying the tax. The one who pays the tax for GTA services can claim the credit for the same. The only condition is that the goods and services will be used for business or furtherance of business.

What is reverse charge mechanism Explain the applicability of reverse charge on GTA

Reverse charge is a new concept introduced under the GST regime for India. Earlier a concept of reverse charge existed in service tax but not for goods. Under the reverse charge mechanism the recepient of service or goods  is liable to pay tax. In normal cases the onus to discharge the liability of tax is on supplier of service or goods, but for certain prescribed cases the onus to discharge the liability of tax shifts to receiver of service or goods and this is called reverse charge mechanism.  CBEC has issued a list of services on which reverse charge is applicable and a short list of goods on which reverse charge is applicable. Applicability of reverse charge on GTA If GTA provides services to the following registered persons then reverse charge mechanism will apply

1. Any factory registered under or governed by the Factories Act, 1948(63 of 1948); or
2. Any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or
3. Any co-operative society established by or under any law; or
4. Any person registered  under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or
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; or
7. Any casual taxable person; located in the taxable territory.

Who is liable to pay taxes under Reverse Charge Basis in case of GTA

The person(should be one from the above mentioned registered person) who is responsible to pay  for freight charged by GTA will also be responsible for payment of taxes as he ll be treated as receiver of service. It depends upon who is responsible for payment of freight the same person will be responsible for payment of taxes under reverse charge basis under GST. It must be noted that if supplier and recepient of goods are from the above mentioned registered persons (whether or not registered under GST law) then any one from them as per their understanding can discharge both the liabilities i.e. pay for services of GTA & pay the taxes on reverse charge basis. However, If  any one from supplier or recepient is an unregistered person or both of them are unregistered. And the unregistered person is  is responsible to pay for freight to a registered GTA then taxes should be paid by GTA. For eg.

• If supplier of goods (should be one from the above mentioned registered person) pays for freight to the GTA then the supplier will pay taxes under reverse charge basis.
• If recepient of goods (should be one from the above mentioned registered person) is responsible to pay to the GTA then the recepient will pay taxes under reverse charge basis.

Will TDS be deducted

Yes, TDS will be deducted @2% u/s  194C of IT Act, 1961 be deducted and deposited from the proceeds payable to goods transport agency by the recepient of service. Compiled by CA Ankita Khetan