Posted by : admin

    share :

GST on goods transport Agency

 

In this article we will discuss about basic provisions of GTA, Applicable GST rate, Place of Supply, Registration Provisions, Reverse Charge & Exemption from tax in certain cases. 

 

Goods Transport Agency (GTA):

 

GTA didn’t defined under GST Act so we have to refer existing definition prescribed under service tax law.

Section 65B (26) of the Finance Act, 1994 defined Goods Transport Agency as “any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called”. 

 

Consignment Note:

Rule 4B of Service Tax Rules, 1994 defined consignment note as “consignment note means a document issued by a goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency”

 

So there are two basic conditions which need to be satisfied to call as GTA:

  • Person must provide transportation of goods services through Road &
  • Issues Consignment note

 

Hence if there is a transporter providing goods transportation services through road but not issuing any documents containing all the basic details of consignment note, will not be treated as GTA.

 

Further Serial No. 18 of Notification no. 12/2017 of Central Tax Rate, exempt the services as: 

Services by way of transportation of goods-
(a) by road excepts the services of— 

(i) Goods transportation agency; 

(ii) Courier agency; 

(b) by inland waterways. 

Means if some person is providing road transport services that are not GTA (not issuing consignment note) and courier agency are exempt from Services Tax. Hence we can say any person other than GTA & Courier are exempt from GST

Registration and Reverse Charge:

 

In general, Services provided by GTA falls under reverse charges, here is a list of specified category of persons to whom services provided by GTA will fall under reverse charge and GTA will not be required to collect tax from such recipient of services.  These persons are as follows

  1. Factory registered under the Factories Act 1948
  2. A society registered under the Societies Registration Act, 1860 or under any other law
  3. A co-operative society established under any law
  4. A person registered under GST
  5. A body corporate established by or under any law; or
  6. A partnership firm whether registered or not (including AOP)
  7. Casual taxable person

Hence if GTA is providing services to any person who doesn’t falls in above specified list i.e. unregistered individual then GTA is required to collect tax from recipient of services and will pay to the government under forward charge

 

Further if GTA is providing services only to specified persons then GTA is not require to get register under GST as liability to pay taxes is on recipient.

 

Place of supply (POS)

 

As per section 12(8) of CGST act 2017:

the place of supply of services by way of transportation of goods, including by mail or courier to––

(a) a registered person, shall be the location of such person registered person

(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation i.e. business place of transporter where goods handed over for transportation 

So if recipient is registered person then place of supply (POS) will be the place for which recipient obtained GSTIN and if recipient is not registered than POS location at which such goods are handed over for their transportation. 

Let’s take an example: 

A procures some goods from Noida for his factory in Delhi and takes GTA services of a person who registered in Haryana. In that case A & B both are registered person in respective state.

Place of supply will Delhi only, as A is registered person in Delhi.

In above example if A is unregistered person then place of supply will the place where goods are handed over for their transportation i.e. Noida as goods procure from Noida and handed over in Noida only irrespective transporter is registered in Haryana

Rate of tax: 

As per Notification no. 11/2017-Central Tax (Rate) as amended by Notification no. 20/2017-Central tax (Rate): GTA have two options to pay taxes if their services don’t fall under reverse charges

  1. Pay taxes at 5% (2.5% each) without claiming input tax on inward supplies
  2. Pay taxes at 12% (6% each) and can claim input credit

 

Further this option is available only to GTA hence if tax to be paid by recipient under RCM then they has to pay tax at 5% only with input credit. Any Recipient paying taxes under RCM can avail input tax credit subject to section 17 of CGST Act.

 

Exemptions:

 

If GTA is providing Services, by way of transport in a goods carriage of following kind are exempted –

(a) Agricultural produce;

(b) Goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees;

(c) Goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty;

(d) Milk, salt and food grain including flour, pulses and rice;

(e) Organic manure;

(f) Newspaper or magazines registered with the Registrar of Newspapers;

(g) Relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or

(h) Defense or military equipment

 

Conclusion:

As we everyone knows that major portion of GTA services is managed by unorganized sector and the workers involved in this sector is also from lower back ground of country, Seeing the organizational structure, government don’t want impose any compliance burden on GTA hence government given relaxation from registration & tax collection in many cases which we explained above. 

0 Comments

Leave A Reply