FAQ on GST Compliance for GTA:
Q1 . What is a Goods Transport Agency ? Why is it Important?
All other means of goods transport by road enjoy exemption from GST other than courier services.
Q2. What are the 2 necessary limbs to Qualify as a GTA ?
“Goods Transport Agency” must issue a consignment note and there should be an agency relationship i.e. transportation of goods on behalf of somebody else i.e. the consignor or consignee.
Q3. Whether a person transporting goods on his own vehicle to his customer be liable to GST ?
Any supplier transporting any goods from his premises to his customer’s premises using his own vehicle ie a Truck, Tempo or Cars shall not be subject to GST as there is no element of Agency and hence exempted fron GST.
Further Para 149 of Budget 2004 of the speech of Honble Finance Minister has clarified that there is no intention to levy service tax on truck owners or truck operators.
Q4. What is the status of GTA under the GST Law ?
Services of transport of goods by road is a taxable supply and hence liable to GST.
Q5. Which tax is leviable CGST/SGST or IGST on transportation of Goods By Road ?
The tax to be charged on supply of GTA services shall depend on the Place of suppy of services as defined under the IGST Act.
As per the provisions of this Act where the location of supplier of service and Location of Recipient of service ( if Registered) ie the person liable to pay the consideration are in the same state, it shall be considered as an Intra State Supply leviable to CGST and SGST.
And if the location of supplier of service and Location of Recipient of service (if Registered) ie the person liable to pay the consideration are in the different states, it shall be considered as an Inter State Supply leviable to IGST.
Q6. Which is the rate of GST on Goods Transport Service ?
The rate of GST on goods transport Service is 5%. The supplier of the service shall NOT be entitled to credit of ITC.
This provision has been proposed to be made more flexible in the recently concluded GST Council Meeting held on 5th August 2017 in which the rate of GST has been proposed to be increased to 12% with full ITC at the option of the supplier of services.
Q7. What will be the rate of GST on GTA services where a manufacturer, Distributor, Wholesaler or trader etc uses the services of GTA to transport goods which is recovered from the customer?
In the above scenario where the supplier hires a GTA to transport goods, it shall be considered to be a composite supply under the GST Law. The value of GTA charges shall be added to the value of Goods and the entire amount shall be subject to GST at the rate at which the goods are taxed under the GST Law.
Q8. What will be the rate of GST on GTA services where more than 1 type of goods with different GST rates are being transported in a goods carriage in the above case. ?
In the above scenario where the supplier hires a GTA to transport more than I type of goods having different GST rates , then there are two alternatives :
Alternative 1 : Allocate the amount of transport charges in the ratio of value of goods and charge GST on the value so arrived at the rate at which those goods are taxable under the GST Law.
Alternative 2 : The value of GTA charges shall be added to the value of Goods and the entire amount shall be subject to GST at the higher of the rates at which the goods are taxed under the GST Law.
Q9. Are there any exemptions from payment of GST on GTA services :
Further there are exemptions from payment of GST on transportation of agriculture produce, 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, defence or military equipment.
Renting of Vehicles meant to carry more than 12 passengers to a GTA shall also be exempt.
Q10. Whether GST on GTA services is required to collected and deposited by the supplier or recepient.
Situations showing who is liable to pay GST in case of a GTA
| Service Provider | Supplier/ Consignor | Receiver of Goods/ Consignee | Perons Liable to Pay Freight | Perons Liable to Pay GST |
| GTA | Company (GST registered or not) | Partnership Firm (GST registered or not) | Company | Company |
| GTA | Partnership Firm (GST registered or not) | Registered Dealer X | X | X |
| GTA | Partnership Firm (GST registered or not) | Registered Dealer X | Firm | Firm |
| GTA | A Co-Op Society Ltd (GST registered or not) | Registered Dealer X | X | X |
| GTA | A Co-Op Society Ltd (GST registered or not) | Registered Dealer X | A Co-Op Society Ltd | A Co-Op Society Ltd |
| GTA | Company A Ltd. (GST registered or not) | Company B Ltd. (GST registered or not) | B Ltd. | B Ltd. |
| GTA | Unregistered Dealer A | Registered Dealer X | A | GTA (if GST registered) |
| GTA | Unregistered Dealer A | Registered Dealer X | X | X |
| GTA | Unregistered Dealer A | Unregistered Dealer F | F | GTA (if GST registered) |
Q11. What are the other compliances which are required to be followed by the person liable to deposit GST under reverse charge ?
The recipient of service shall raise a tax invoice as and when it receives the GTA services. Also he shall issue a payment voucher to the supplier. The GST under reverse charge is required to be deposited in cash only and ITC shall not be available. Further he shall reflect the taxes paid under reverse charge in his GSTR-2.
Q12. Is the Threshold exemption of Rs.5000/- for purchases made from unregistered dealers in a single day also applicable on GTA services.
No. The threshold exemption is available only for supplies specified under section 9(4) and 5(4) of CGST Act and IGST Act respectively. GTA services fall under sections 9(3) and 5(3) of CGST Act and IGST Act respectively and hence no exemption is available.
Q13. Is there an option to raise a consolidated invoice at month end as provided for expenses from unregistered dealers in other cases?
No the option to raise a consolidated invoice at month end is not available in case of reverse charge on GTA Services as these are covered by sections 9(3) and 5(3) of CGST Act and IGST Act respectively and not by section 9(4) and 5(4) of CGST Act and IGST Act respectively.
Q14. Is a GTA liable to register?
As per Notification No. 5/2017- Central Tax dated 19/06/2017, a person who is only engaged in making supplies of taxable goods/services, where the total tax on which is liable to be paid on reverse charge basis by the recipient as the category of persons exempted from obtaining registration under GST.
Thus, a GTA does not have to register under GST if he is exclusively transporting goods even if the turnover exceeds 20 lakhs as the total tax is required to be paid by the recipient under reverse charge basis.
| Service | Turnover | GST Paid by | |
| Case 1 | Transporting Goods of registered dealer or any of the 7 mentioned above | 9 Lakhs | Register Dealer / Recipient of service under RCM |
| Transporting Goods of URD | 3 Lakhs | —– | |
| Total turnover | 12 lakhs | Aggregate turnover is below 20 Lakhs threshold. GTA is not required to register | |
| Case 2 | Transporting Goods of registered dealer or any of the 7 mentioned above | 19 lakhs | Register Dealer / Recipient of service under RCM |
| Transporting Goods of URD | 3 Lakhs | GTA | |
| Total turnover | 22 lakhs | Aggregate turnover exceeds 20 Lakhs threshold. GTA will have to register as it is supplying to URD. | |
| Case 3 | Transporting Goods of registered dealer or any of the 7 mentioned above | 25 lakhs | Register Dealer / Recipient of service under RCM |
| Transporting Goods of URD | 0 Lakhs | ||
| Total turnover | 25 lakhs | Aggregate turnover exceeds 20 Lakhs threshold. GTA is still not required to register as per Notification No.5/2017. |