What is a GTA?
As per Notification No.
11/2017-Central Tax (Rate) dated 28th June, 2017, “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.
This means, while others might also
hire out vehicles for goods transportation, only those issuing a consignment
note are considered as a GTA. As per Explanation to Rule 4B, Service
Tax Rules, 1994, a consignment note is a document, issued by a goods transport
agency against the receipt of goods for the purpose of transport of goods by
road in a goods carriage. The consignment note is serially numbered, and
contains the names of the consignor and consignee, registration number of the
goods carriage in which the goods are transported, details of the goods, place
of origin and destination, and person liable for paying service tax whether
consignor, consignee or the GTA .
The courts held only persons issuing
consignment notes are covered within GTA. So, individual truck owners who do
not book cargo and issue consignment note in normal course of business are, not
GTA and accordingly, services provided by them are not liable to service tax.
Goods
Transport Agency under GST
GST will not
apply on transport of following goods by a goods transport agency-
- agricultural produce
- milk, salt and food
grain including flour, pulses and rice
- organic manure
- newspaper or
magazines registered with the Registrar of Newspapers
- relief materials
meant for victims of natural or man-made disasters
- defence or military
equipment
- goods, where
consideration charged for the transportation of goods on a consignment
transported in a single carriage is less than Rs. 1,500
- goods, where
consideration charged for transportation of all such goods for a single
consignee does not exceed Rs. 750
Is a GTA liable to register?
As per
Notification No. 5/2017- Central Tax dated 19/06/2017, a person who is only
engaged in making supplies of taxable goods/services, where the total tax on
which is liable to be paid on reverse charge basis by the recipient as the
category of persons exempted from obtaining registration under GST.
Thus, a GTA
does not have to register under GST if he is exclusively transporting goods
even if the turnover exceeds 20 lakhs as the total tax is required to be paid
by the recipient under reverse charge basis.
Reverse Charge in case of
GTA
Normally a
service provider is required to pay taxes, but in case a GTA provides the
services to the following persons, recipient of services is required to pay GST
under reverse charge (notification No. 13/2017- Central Tax (Rate) dated 28th
June, 2017) :-
- Factory registered
under the Factories Act,1948
- A society registered
under the Societies Registration Act, 1860 or under any other law
- A co-operative
society established under any law
- A person registered
under GST
- A body corporate
established by or under any law; or
- A partnership firm
whether registered or not (including AOP)
- Casual taxable
person
Who will pay under Reverse
Charge Basis?
As per
Notification No. 13/2017- Central Tax dated 28/06/2017 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 receiver of
service.
Payment is by sender
If the supplier of goods (consignor)
pays the GTA, then the sender will be treated as the recipient. If he belongs
to the category of persons above then he will pay GST on reverse charge basis
Payment by Receiver
If the liability of freight payment
lies with the receiver (Consignee), then the receiver of goods will be treated as
a receiver of transportation services. If he belongs to any of the above
category of persons, then he will pay GST on reverse charge basis.
Note- As per notification Notification
No.8/2017-Central Tax (Rate) dated 28th June 2017, intra-State supplies of
goods or services or both received by a registered person from any supplier,
who is not registered, is exempted from GST if it does not exceed Rs. 5,000 in
a day.
Input Tax Credit
***
Notification No. 11/2017 – Central tax (Rate) dated 28.06.2017 mentions that
the restriction of ITC is only on goods or services used in supplying the GTA
service.,i.e., they are referring the GTA itself. In case of reverse charge,
the person paying tax is the service recipient who is not supplying the GTA
service so the concern of using any inputs to supply GTA service does not
arise. He is liable to pay GST only because of RCM.
So GST
paid on GTA under RCM can be availed as ITC by the person paying the tax.
Place of Supply
The place of
supply of services by way of transportation of goods, including by mail or
courier to––
(a) a
registered person, shall be the location of such person
(b) a person
other than a registered person, shall be the location at which such goods are
handed over for their transportation.
Invoicing for GTA
Any GST
compliant invoice of a GTA must have following details-
- Name of the
consignor and the consignee
- Registration number
of goods carriage in which the goods are transported
- Details of goods
transported
- Gross weight of the
consignment
- Details of place of
origin and destination
- GSTIN of the person
liable for paying tax whether as consigner, consignee or goods transport
agency
- Name, address and
GSTIN (if applicable) of the GTA
- Tax invoice number
(it must be generated consecutively and each tax invoice will have a
unique number for that financial year)
- Date of issue
- Description of
service
- Taxable value of
supply
- Applicable rate of
GST (Rates of CGST, SGST, IGST, UTGST and cess clearly mentioned)
- Amount of
tax (With breakup of amounts of CGST, SGST, IGST, UTGST and cess)
- Whether GST is
payable on reverse charge basis
- Signature of the
supplie
Payment of Tax by a GTA
A GTA cannot
enjoy any ITC on any of the inputs. So, payment of tax will be only through
cash in the normal modes of card/netbanking/cash (only for taxes upto
Rs.10,000)
Returns to be Filed by a GTA
If all the
services of the GTA fall under RCM then a GTA is not required to register.
If a GTA
registers, then it will have to file the normal 3 monthly returns – GSTR-1
(sales), GSTR-2 (purchases-no ITC available) & GSTR-3 (monthly summary
& tax liability)
FAQs on GTA
Sumit hired
a GTA to transport his goods. The consideration charged was Rs. 1,200.
Will Sumit pay GST?
Sumit will not
pay GST under RCM as the consideration for transportation of goods on a
consignment transported in a single carriage is less than Rs. 1,500.
Sumit hired
a GTA to transport goods. The GTA was asked to come 2 days as Sumit would
receive the goods in batches. The entire consideration was Rs. 600. Will Sumit
pay GST?
Sumit will not
pay GST because the consideration charged for transportation of all such goods
for a single consignee does not exceed Rs. 750.
Mr. Rohit,
a working professional, is moving houses and hires Pundu GTA to transport his household
items. Pundu demands Rohit to pay GST under RCM as moving charges are Rs.
6,000. Rohit is confused.
Ans: Rohit is
unregistered and if Pundu GTA is also unregistered under GST then, GST is not
applicable.
If Pundu is
registered, then it will pay GST of 5%. RCM will not apply on Rohit.
Sumit, a
garments shop owner in Kolkata, hires a truck to deliver goods from wholesaler
to his (Sumit’s) shop. Sumit’s turnover is less than 20 lakhs and he has not
registered under GST. The GTA demands that Anand should pay tax under RCM.
Anand argues that since he is not registered, he does not have to pay any GST.
Ans: Only the
persons above (Notification No. 13/2017- Central Tax (Rate) dated 28th June,
2017) are required to pay GST under RCM. Unregistered dealers (Sumit)
purchasing goods/services from unregistered GTA do not have to pay GST under
reverse charge mechanism. If the URD hires from a registered GTA, then
the registered GTA is liable to pay GST.
So, Sumit is
not liable to pay GST under RCM.
Sumit now
purchases garments from Assam and pays for a truck to deliver the goods to his
shop in Kolkata. The GTA says that Sumit has to register for GST as he is
making an inter-state purchase as only registered dealers can have inter-state
trade.
Ans: An
unregistered person can make inter-state purchases. For making inter-state
sales, he will have to be compulsorily registered.
Since Sumit is
an unregistered dealer and the GTA is also unregistered then the concept of RCM
does not arise.
The GTA is
registered at Assam and its branch is collecting cash in kolkata on his behalf.
Recipient of service Sumit is in kolkata. If Sumit was registered, would he
have charged IGST or SGST/CGST under RCM?
If the
original transporter in Assam sends the bill to Sumit, then IGST should be charged.
If the branch sends the bill then SGST/CGST will apply.
Abhisek has
received a one-time contract to sell garments to a dealer in Mumbai. Abhisek
hires a truck to send the goods.
Since, Abhisek
is not registered under GST, he cannot make any inter-state sale. To make an
inter-state sale, he must register as a casual taxable person. Then when he
hires a truck to send the garments, automatically he is liable to pay GST under
RCM.
Neha
decides to voluntarily register. He hires a truck again to transfer goods from
the wholesaler to his shop. GTA asks him to pay GST on RCM as he is registered.
But Anand’s view is that his turnover is still below 20 lakhs.
Ans: The
threshold of turnover does not matter if a person is voluntarily registered.
All provisions of GST Act will apply to a registered person. Neha is liable to
pay GST under RCM.
Sumit’s
turnover has increased to 54 lakhs. He wants to shift to composition scheme as
he sells mainly to end consumers. But he is worried as his GTA has told him
they would not deliver his goods if he is registered under composition scheme
as the GTA become liable for GST.
Ans: This is a
myth. Even composition dealers are liable to pay GST under RCM. Sumit will pay
GST on RCM if he hires a GTA whether he is registered as a composition dealer
or as a normal dealer
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