GST on GTA (from recipient perspective):

Understanding GST on Goods Transport Agency (GTA) Services (from recipient perspective)

Change w.e.f 18.07.2022

Categories of transporters:

  1. A transporter who are GTA and not charging GST on Bills.
  2. A transporter who are GTA and charging 5% or 12% GST on Bills.
  3. A transporter who is not a GTA. 
GST Treatment for GTA, whether registered or unregistered in GST will remain the same.

GST treatment:

Category 1:

GST shall be paid on reverse charge basis (RCM) by the recipient of services (except if recipient is unregistered Individuals and HUF). The rate of tax under RCM:  5% (18% have been abolished).
 

Category 2:

If the GTA opts to pay the tax on forward charge basis i.e. charge 5% or 12%, then No RCM is to be paid.  You'll be eligible to avail ITC of full 5% or 12%.

W.e.f. 18th July' 2022 : GTA can opt to charge 5% or 12% at his option (previously only 12%). 
Transporter have to mention whether he's paying tax himself or RCM is to be paid in each invoice/consignment note.

Category 3:

If a transporter is not a GTA, no GST will be charged by him on bills and RCM is not required to be paid.
 

What are GTA Services?

“Goods Transport Agency” or GTA means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. (Notf No. 11/2017- CT (Rate) dt 28th June, 2017)

Thus, a consignment note is an essential condition to be considered as a GTA.

GTA services which are exempt:

  1. Transport of agricultural produce.
  2. Transport of milk, salt, food grains including rice, flour, pulses
  3. Transport of organic manure
  4. Transport of newspapers or magazines registered with the Registrar of Newspapers
  5. Transport of relief materials for victims of natural or man-made disasters, calamities, accidents or mishaps
  6. Transport of defence or military equipment
Limit of Rs 750/Rs 1500 have been removed w.e.f 18.07.2022 i.e. RCM to be paid on every freight expense.

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