GST - Goods Transport Agency: EximGuru.com
Goods Transport Agency
Meaning
As per Explanation given in Notification No. 11/2017-Central Tax (Rate)- “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.
Classification of Services:
| Heading 9965 | Goods Transport Services |
| Group 99651 | Land transport services of Goods |
| | 996511 | Road transport services of Goods including letters, parcels, live animals, household and office furniture, containers and the like by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles |
| | 996512 | Railway transport services of Goods including letters, parcels, live animals, household and office furniture, intermodal containers, bulk cargo and the like |
| | 996513 | Transport services of petroleum and natural gas, water, sewerage and other goods via pipeline |
| | 996519 | Other land transport services of goods nowhere else classified |
| Group 99652 | Water transport services of goods |
| | 996521 | Coastal and transoceanic (overseas) water transport services of goods by refrigerator vessels, tankers, bulk cargo vessels, container ships and the like |
| | 996522 | Inland water transport services of goods by refrigerator vessels, tankers and other vessels |
| Group 99653 | Air and space transport services of goods |
| | 996531 | Air transport services of letters and parcels and other goods |
| | 996532 | Space transport services of freight |
| Heading 9967 | Supporting services in transport |
| Group 99679 | Other supporting transport services |
| | 996791 | Goods transport agency services for road transport |
| | 996792 | Goods transport agency services for other modes of transport |
| | 996793 | Other goods transport services |
GST Rates & Conditions:
| Chapter, Section or Heading | Description of Service | CGST Rate (%) | IGST Rate (%) | Conditions |
| Heading 9965 (Goods transport services) | i. Transport of goods by rail (other than services specified at item no. (iv)). | 2.5 | 5 | Provided that credit of input tax charged in respect of goods in supplying the service is not utilized for paying central tax or integrated tax on the supply of the service |
| | ii. Transport of goods in a vessel | 2.5 | 5 | Provided that credit of input tax charged on goods (other than on ships, vessels including bulk carriers and tankers) used in supplying the service has not been taken [Please refer to Explanation] |
| | iii. Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use).
Explanation.- “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. | 2.5 | 5 | Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation] |
| | iv. Transport of goods in containers by rail by any person other than Indian Railways. | 6 | 12 | |
| | v. Goods transport services other than (i), (ii), (iii) and (iv) above. | 9 | 18 | |
| Heading 9967 (Supporting services in transport) | i. Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use). Explanation.- “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. | | | Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation] |
| | i. Supporting services in transport other than (i) above. | 9 | 18 | |
Explanation: Wherever a rate has been prescribed in this notification subject to the condition that credit of input tax charged on goods or services used in supplying the service has not been taken, it shall mean that,-
a) credit of input tax charged on goods or services used exclusively in supplying such service has not been taken; and
b) credit of input tax charged on goods or services used partly for supplying such service and partly for effecting other supplies eligible for input tax credits, is reversed as if supply of such service is an exempt supply and attracts provisions of sub-section (2) of section 17 of the Central Goods and Services Tax Act, 2017 and the rules made thereunder.
Exemptions
Notification No. 9/2017-Integrated Tax (Rate)
| Chapter, Section, Heading, Group or Service Code (Tariff) | Description of Services | CGST Rate (%) | IGST Rate (%) | Conditions |
| Heading 9965 or Heading 9967 | Services provided by a goods transport agency, 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 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) defence or military equipments. | Nil | Nil | Nil |
| Heading 9966 or Heading 9973 | Services by way of giving on hire –
a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or
b) (b) to a goods transport agency, a means of transportation of goods | Nil | Nil | Nil |
where “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;
Place of supply
Invoice
Rule 54 of CGST Rules 2017: Tax invoice in special cases
Where the supplier of taxable service is a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage, the said supplier shall issue a tax invoice or any other document in lieu thereof, by whatever name called, containing the gross weight of the consignment, name of the consigner and the consignee, registration number of goods carriage in which the goods are transported, details of goods transported, details of place of origin and destination, Goods and Services Tax Identification Number of the person liable for paying tax whether as consigner, consignee or goods transport agency, and also containing other information as mentioned under rule 46.(Rule 46: Tax invoice).
Accounts and Records
As per section 35 (2) of CGST Act 2017, Every owner or operator of warehouse or godown orany other place used for storage of goods and every transporter, irrespective of whether he is a registered person or not, shall maintain records of the consigner, consignee and other relevant details of the goods in such manner as may be prescribed.
As per Rule 58 (4) of CGST Rules 2017, Subject to the provisions of rule 56 (Maintenance of accounts by registered persons),-
- a) any person engaged in the business of transporting goods shall maintain records of goods transported, delivered and goods stored in transit by him along with the Goods and Services Tax Identification Number of the registered consigner and consignee for each of his branches.
Reverse Charge Mechanism
As per Notification No. 13/2017- Central Tax (Rate) & Notification No. 10/2017- Integrated Tax(Rate), Goods and Services Tax, shall be paid on reverse charge basis by the recipient of the such services as specified in below Table:
| Category of Supply of Services | Supplier of service | Recipient of Service |
Supply of Services by a goods transport agency (GTA) in respect of transportation of goods by road to-
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 the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or
e) any body corporate established, by or under any law; or
f) any partnership firm whether registered or not under any law including association of persons; or
g) any casual taxable person | Goods Transport Agency (GTA) | 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 the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or
e) any body corporate established, by or under any law; or
f) any partnership firm whether registered or not under any law including association of persons; or
g) any casual taxable person; located in the taxable territory. |
For purpose of this notification,- The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification.
Compliance Requirements in hands of GTA Service Recipients:
On being the service recipient in above situation following compliances in the hands of ServiceRecipient:
- Registration:
As per Section 24 of CGST Act’ 2017 , A person paying tax under the reverse charge mechanism has to compulsorily get registered even if the turnover is below threshold limit.
However, Aggregate turnover does not include value of inward supplies on which tax is payable on reverse charge basis.
- Time of Supply:
In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:
(a) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
(b) the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:
Provided that where it is not possible to determine the time of supply under clause (a) or clause (b), the time of supply shall be the date of entry in the books of account of the recipient of supply.
- Tax Invoice:
A registered person who is liable to pay tax under above provision shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of services.
(Format is attached as Annexure I)
- Payment Voucher:
A registered person who is liable to pay tax above provision shall issue a payment voucher at the time of making payment to the supplier.
(Format is attached as Annexure II)
- Input Tax Credit:
The service recipient can avail Input Tax credit on the Tax amount that is paid under reverse charge on goods and services. The only condition is that the goods and services are used or will be used for business or furtherance of business.
- Accounting Entry:
Suppose the Registered Taxable Person, Mr. A received GTA Services from an Corporate Entity, of Rs. 50,000 taxable at the GST rate of 5%. In this case the Accounting entry will be as follows:
For Intrastate Receipt of Service:
| Freight A/c | Dr. | 50,000 | |
| CGST - Input A/c | Dr. | 1,250 | |
| SGST - Input A/c | Dr. | 1.250 | |
| To Transporter A/c | | | 49,000 |
| To CGST- RCM Payable A/c | | | 1,250 |
| To SGST- RCM Payable A/c | | | 1,250 |
| To TDS Payable A/c | | | 1,000 |
For Intrastate Receipt of Service:
| Freight A/c | Dr. | 50,000 | |
| IGST - Input A/c | Dr. | 2,500 | |
| To Transporter A/c | | | 49,000 |
| To IGST- RCM Payable A/c | | | 2,500 |
| To TDS Payable A/c | | | 1,000 |