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.

    • Related Articles

    • Whether IGST or CGST/SGST to be paid on GTA services?

      Confusion of Charging CGST/SGST or IGST? Section 12 of IGST Act states that the Place of Supply for services by way of transportation of goods, including by mail or courier would be as follows: Recipient Place of Supply Registered Person Location of ...

    • GST Updates (July '22)

      Central Board of Indirect Tax and Custom (CBIC) has released various notifications enforcing various recommendations of 47th GST Council meeting held on 29th June 2022 and related to E-invoicing. Applicable from 18.07.2022 RELATED TO GOODS Rates on ...

    • GST on Pre-Labelled and Pre-packaged goods (GST Update 13.07.2022)

      There are various misunderstanding as to levy of GST on common food products including wheat, rice etc. It is being said that this move by government will increase the price of essential commodities thus affecting common man. Various mandi have held ...

    • GST on Residential Property

      As per the new rules w.e.f. July 18, 2022, if the tenant of the residential property is GST-registered, he has to pay 18% GST irrespective of the fact that the landlord is GST-registered or not. The payment of the GST shall be made under the reverse ...

    • E-Invoicing : Decoding the Mysteries for Small Traders / MSME

      Applicability: W.e.f. 1st October, 2022: If turnover on a single PAN exceeds Rs 10 Cr in any financial year from FY 17-18. For ex: Mr. A has following turnovers: Financial Year Turnover (in ₹ Cr) 18-19 15 19-20 8 20-21 5 21-22 6 As Turnover in FY ...