GST on GTA Made Simple: Comprehensive Guide to RCM, FCM and Exemptions

GTA stands for Goods Transport Agency. It is an individual who transports goods by road and issues a consignment note. The ones who transport goods but do not issue consignment notes are not considered as GTA and their service does not attract GST (Goods and Services Tax).

Thus, Individual Truck/Tempo operators who do not issue a consignment note are not covered under the definition of GTA.

Taxability Structure for GTA

This structure is updated as of September 22, 2025; earlier than this date, the taxability for GTA was 12% with ITC (Input Tax Credit).

A Goods Transport Agency (GTA) must choose every year whether it wants to pay GST under Forward Charge (18%) or continue under RCM (5%). To choose Forward Charge, the GTA must file Annexure V on the GST Portal. To cancel this choice later, the GTA must file Annexure VI. Once the option is chosen, it stays the same for the entire financial year.

If a GTA chooses Forward Charge, it must also add a specific declaration on every invoice it issues. This is required under Annexure III of Notification 13/2017, updated through Notification 5/2022 (effective from 18 July 2022).

• Declaration: I/we have taken registration under the CGST Act, 2017 and have exercised the option to pay tax on services of GTA in relation to transport of goods supplied by us from the Financial Year __________ under forward charge and have not reverted to the reverse charge mechanism.

Who is required to pay GST under RCM?

RCM applies when the transport charges (freight) are paid by the following recipients:

• Factory
• Society
• Cooperative Society
• Body Corporate
• Registered Person under GST
• Partnership Firm / AOP
• Casual Taxable Person
• GTA must apply 18% under FCM if opted (otherwise the service is not taxed according to the provisions of GST for unregistered recipients) if freight is paid by an unregistered individual.

Exemptions for GTA:

The following are exempt from GTA:

• Transport of agricultural produce
• Milk, food grains, salt
• Organic manure
• Newspapers
• Relief/disaster materials
• Defence goods for the Government
• Services provided by a goods transport agency to an unregistered person, including an unregistered casual taxable person

Place of Supply for GTA:

• The place of supply for GTA for a registered recipient is the location of the recipient.
• The place of supply for GTA for an unregistered recipient is the location where goods are handed over for transport.