Transportation means shifting of goods, passengers etc. from one location to another via various modes of Transport like road, rail, inland waterways or air. Moreover, Transportation is the activity that connects the business to its supply chain partners and customers and is a major influence on the customer’s satisfaction with the company.
Services of transportation of goods by road are exempt from GST except for the services of:
Now the question arises, “what is GTA?”. GTA means any person who provides service in relation to transport of goods by road and issues ‘Consignment Note’ by whatever name called. Thus, transport of goods by road will not be taxable unless the service provider issues consignment note.
Note: – Mere bill is not consignment note. It was held in one of the cases that consignment note issued by a GTA represents its liability to:
Services of Goods Transport Agency (GTA) in relation to transportation of goods attract GST @ 5% or 12%. However, the rate of 5% is subject to the condition that the credit of input tax charged on goods or services will not be taken, and the rate of 12% is subject to the condition that the GTA is opting to pay tax @ 12% on all of its GTA services.
Therefore, where GTA is not eligible to claim ITC (i.e. @ 5 %), the liability of GST lies on the service recipient (i.e. under RCM). The service recipient can, however, claim the ITC subject to the fulfilment of conditions required to claim any normal ITC.
As per Notification No. 32/2017 – Central Tax (Rate) dated 13th October 2017, any service provided by a ‘Goods Transport Agency’ to an unregistered person including an ‘unregistered casual taxable person’ will be Nil rated except for the following service recipients.
The following persons would be treated as service recipients:
In case of services provided by Goods Transport Agency (GTA) (who has not availed the option of paying CGST @ 6% as per Notification no 22/2017 – Central Tax (Rate) dated 22nd August 2017), the service recipient is liable to pay GST, i.e. Reverse charge is applicable. That means, if GTA is availing the option of paying 12% as GST (6% CGST, 6% SGST) then Reverse charge will not be applicable.
As per Notification No 12/2017 – Central Tax (Rate) dated 28.06.2017 following services provided by GTA are out of the ambit of GST:
If any service is provided to a Goods Transport Agency (GTA) by way of Hire, it is also exempt from GST.
There are a lot of rumours in the market about whether Goods Transport Agency (GTA) is required to register under GST or not. As per Notification No 05/2017 – Central Tax dated 19.06.2017, the persons who are engaged in the supply of only those services which are taxable under reverse charge are exempt from registering themselves under GST. Hence, GTA is not required to register under GST if he is exclusively providing transportation of services irrespective of turnover exceeds 20 lacs. But if the GTA chooses the option to pay tax at the rate of 12 % and avail the credit of that input tax, then only GTA is required to register under GST.
In case of determining the place of supply of services by way of transportation of goods, there are two rules:
|S. No.||Supply to||Place of Supply|
|1||A registered person||Location of such person|
|2||Other than a registered person||Location at which goods are handed over for their transportation.|
GST is a new and biggest tax reform in India, and a lot of hues and cries are natural for such a significant move. Even the government is constantly on its toes to address all the concerns of the taxpayers. The notifications as mentioned above clarify a lot about the GTA services, but one cannot be sure about the future announcements of the government since GST is yet to mature.