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S&A Knowledge Series - GST on goods transport agency

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Happy to share the first update on GST on Goods Transport Agency. This impacts all of us since the tax under GTA is payable by us on the reverse charge basis.

Please note this is not a very detailed writeup covering every aspect of the law. This is for basic general reading and presents a broad outline. If you have any specific query then please feel free to reach out to us for a solution.

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S&A Knowledge Series - GST on goods transport agency

  1. 1. Page | 1 ` GST on Goods Transport Agency S&A Knowledge Series Prepaired by Anjali Roy Article Assistant at Seth & Associates, Chartered Accountants New Delhi | Lucknow | Coimbatore
  2. 2. Page | 2 WHO IS A GTA As per Section 65B (26) of the Finance Act, 1994; “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”. Therefore, in the Service Tax regime, issuance of Consignment Note (C/N) was integral and mandatory requirement before any road transporter could be brought within the ambit of GTA. RATE OF TAX To be levied at 12% in case the GTA avails Input Tax credit while suppling the service else to be levied at 5% PERSON LIABLE TO PAY In case the tax is to be paid at 5% then the person who is the recipient of the supply is supposed to discharge the liability and not the supplier (reverse charge). Following the recepients upon which the duty has been casted. a) Any factory registered under or governed by the Factories Act, 1948(63 of 1948); or b) 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 c) any co-operative society established by or under any law; or d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or e) the State Goods and Services Tax Act or theUnion Territory f) any body corporate established, by or under any law; or g) any partnership firm whether registered or not under any law including association of persons; or h) any casual taxable person.
  3. 3. Page | 3 EXEMPT SUPPLIES Services provided by a GTA, by way of transport in a goods carriage of: a) agricultural produce; b) goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage c) does not exceed one thousand five hundred rupees; d) goods, where consideration charged for transportation of all such goods for a single consignee does not exceed e) rupees seven hundred and fifty; f) milk, salt and food grain including flour, pulses and rice; g) organic manure; h) newspaper or magazines registered with the Registrar of Newspapers; i) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or j) defence or military equipments. Similarly, the following services received by the GTA (Heading 9966 or 9973) is also exempt in terms of notification no.12/2017- Central Tax (Rate) dated 28.06.2017 ( Services by way of giving on hire : (b) to a goods transport agency, a means of transportation of goods CONCLUSION To qualify as services of GTA, the GTA should be necessarilyissuing a consignment note. Only services provided by a GTA are taxable under GST. Services of transportation of goods by a person other than GTA are exempt. Moreover, in cases where the service of GTA is availed by the specified categories of persons in the taxable territory, the recipients who avail such services are the ones liable to pay GST and not the supplier of services unless the GTA opts for collecting and paying taxes @ 12% (6% CGST + 6% SGST). Seth & Associates was established in 1975 and since then it has been providing unparalleled value addition to its client. We are a firm with diverse and rich exposure in various fields. All our partners are full time active working partners looking into specific sector domains such as Corporate Law, Direct Tax, Indirect Taxes, Raising Capital (Bank and Equity), Business Advisory solutions, Forensic and Information Technology audit and many other core sectors relevant to overall growth of the clients. The information herein contained is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endevour to provide accurate and timely information, there can be no gurantee that such information is very accurate and considers the latest amendment in laws which are very frequent. The above is purely for academic reading and general awareness of the law. No one should act on this information with appropriate professional guidance which requires a thorough exemation of a particular situation. This content is owned by Seth & Associates, Chartered Accountants and is not be reproduced without our explicit permission. | New Delhi | Lucknow | Coimbatore