Among all the other confusions among the GST provisions, one of the important ones is regarding the applicability of GST on Transporter. Every person who deals in goods needs their services, and also it is listed among the services in which GST registration is payable on reverse charge when services are provided to a registered person.
Applicability of GST on Transporter
Notification no. 12/2017-Central Tax (Rate) Serial No. 18 exempts the individual truck/tempo operators who do not issue any consignment note from GST. Therefore goods transport agencies who issue consignment notes and/or who are using fleet of others and working only as agency is liable to pay GST.
Transport of goods by non-motorised vehicles, such as rickshaws, is also exempted from GST payment.
Requirement of GST Registration for Transporter
Every person who has a turnover of more than Rs. 20 lakhs in a financial year is liable for registration. This limit gets reduced to Rs. 10 lakhs in case of special category states.
However, Notification No. 5/2017-Central Tax dated 19/06/2017 exempts the person who is making supplies of taxable goods or services and total tax on which is liable to be paid on reverse charge by the recipient of such goods or services from taking registration even if the turnover exceeds the exemption limit.
Therefore if a GTA provides all its services to registered person only then such GTA is not required to take registration even if his turnover exceeds the specified limit of Rs. 20/10 lakhs.
Also section 23(2) of CGST Act states that a person who is engaged exclusively in the business of supplying goods and services or both that are not liable to tax or wholly exempt from tax are not required to take registration. For Example – A GTA who supplies services only to farmers in respect of agricultural produce is not required to take registration.
GST rate of 5% is applicable on GTA but in such case he is not allowed to take input tax credit (ITC) of gst paid on goods and services which are used in supplying such services. If he wants to take ITC of GST paid on inputs then he can opt for an option in which he is required to pay GST @ 12% and then take ITC on all inputs.
