GST on GTA Services in India
Transportation is one of the most important elements in business operations. The change in the petrol and fuel expenses would increase the expense related to transportation and this, in turn, will increase the total cost to the company. In India, the transportation model on which most of the business entities rely is road transportation. And this is mostly done by a transporter or courier agency.
Service of Transportation of Goods exempt under GST
- A GTA,
- A courier agency.
– By Inland waterways.
Hence, it is clear that the services provided through GTA for the transportation of goods are taxable under the GST Act.
The role of GTA comes majorly with respect to the transportation of goods by road as this is one of the major ways which are chosen by the entities. Hence, we can say that GTA is nothing but Goods Transport Agency. And GTA provides service in relation to transport of goods by road and issues consignment notes, by whatever name called. So, it can be concluded that only those transporters who are providing consignment notes are considered as GTA as per the GST Act.
They would provide the consumer with the following services:
– Packing/ unpacking
– Temporary warehousing and such other services may come under their service list.
This is a note which will be issued by the GTA, for acknowledging the receipt of goods for the purpose of being transported by road in a single carriage. If this transporter does not issue a consignment note to the consumer, then the service provider or transporter cannot be considered under the GTA for the purpose of the GST Act.
When the GTA issues a consignment note, it depicts that the lien on goods has now been referred to the transporter and they shall be held responsible until the goods are safely delivered to the destination. A consignment note contains the following in general terms:
– Name of consignor
– Name of consignee
– Registration number of the carriage of the goods using which the goods are transported by the GTA to the consignee
– Details of the goods
– Place of origin
– Place of destination.
– Person liable to pay GST which can be the consignor, consignee, or even the GTA itself.
Rates of GST for GTA
|SL. NO.||PARTICULARS||RATE OF GST|
|1||Any goods which are not specified below||– GST Rate 2.5% (CGST+SGST) or 5% IGST
Rate can be availed if credit of input tax which was paid on goods and services used in providing services are not taken by GTA.
– GST Rate 6%% (CGST+SGST) or 12% IGST
This provides that when the goods transport agency opting to pay tax at the rate of 6% shall henceforth be liable to pay tax at the rate of 6% on all the services pertaining to GTA provided by it.
– agricultural produce milk, salt, and food grain including flour, pulses, and rice
– organic manure
– newspaper or magazines which are registered with the Registrar of Newspapers of the country
– relief materials that are targeted for people who have suffered from loss due to natural or man-made disasters
– defence or military equipment
|3||Carrying,goods, where payment is less than INR 1,500 and this is the consideration charged for the transportation of goods on a consignment transported in a single carriage||0%|
|4||Carrying,goods, where the price charged for transportation of all such goods for a single consignee does not exceed INR 750||0%|
|5||Used household goods for personal use||0%|
|6||Transporting goods belonging to persons who are not registered under the GST Laws||Earlier exempted, but made taxable now, but to be notified yet.|
|7||Transporting goods of casual taxable persons who are not registered with GST Act or Laws||Earlier exempted, but made taxable now, but to be notified yet.|
|8||Transporting goods -GST paid by GTA||5% with no ITC or
12% with ITC
|9||Hiring out a vehicle to a GTA||0%|
Reverse Charge Mechanism (RCM) for GTA
Under RCM, the liability for paying the tax shall befalling on thebeneficiary of the supply of goods or services or both, and not the provider or the supplier who is making such supply.
And this shall be applicable in case of a supply of services which are made by a GTA, who has not paid tax at the rate of 6% (CGST+SGST) or 12% (IGST), for transporting goods by road to:
- any factory which was formed by getting registered under or governed by the Factories Act, 1948
- any society which was formed under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India
- any co-operative society registered by or under any law
- any person who has taken registration under the CGST or the Central Goods and Services Tax Act or the IGST or the Integrated Goods and Services Tax Act or the STGST or the State Goods and Services Tax Act or the UTGST or the Union Territory Goods and Services Tax Act
- anybody corporate which has been incorporated, by or under any law
- any partnership firm whether formed and incorporated or not under any law including association of persons
- any casual taxable person.
Thus, the above-stipulated recipients will have to pay GST at the rate of 2.5% (CGST+SGST) or 5% (IGST) for the receipt of such services from GTA.
Place of Supply under GTA
In case of services that are provided to a registered person, the location of such a registered person shall be the place of supply.
But if the service is supplied to a person who is not registered under the GST Act, then the place of supply will be the point at which such goods are handed over for their transportation.
And if the location of supplier of service or the location of the recipient of service is outside India, place of supply of service or transportation of goods by GTA shall be the place of terminus of such goods.
Records and Accounts to be Maintained by GTA
The GTA should maintain records of the consignor, consignee, and relevant details pertaining to the goods which are transported in such a prescribed manner. And a person occupied in the business of transporting goods shall hold the records of,
– goods transported
– goods delivered
– goods stored in transit by him
– GSTIN of the registered consigner and consignee for each of the GTA’s branches.
Returns to be Filed by GTA
If all the services provided by the GTA falls under RCM then a GTA is not required to register. But, if a GTA registers itself under the GST Act, then it will have to file returns namely:
– GSTR-1 which is the sales return
– GSTR-2 which records the purchases-no ITC available
– GSTR-3, monthly summary of purchases and sales, and the tax liability.