Among all the other confusions among the GST provisions, one of the important one is regarding applicability of GST on Goods Transport Agency (GTA). Every person who deals in goods needs their services and also it is listed among the services in which GST is payable on reverse charge when services is provided to a registered person.
Applicability of GST on GTA
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 for example rickshaw are also exempted from payment of GST.
Requirement of Registration
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 are 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.
Benefit of composition scheme is not available to a goods transport agency.
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. [Point no. (iii) of Notification No. 20/2017-Central Tax (Rate) dated 22.08.2017]. In such case GTA has to pay gst on all services provided by him and no reverse charge is applicable.
NIL Rated Services
Services provided by a GTA in respect of following cases is taxable at NIL rate
(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
(h) defence or military equipments.
(i) Services provided by a goods transport agency to an unregistered person, including an unregistered casual taxable person, other than the persons who are covered under reverse charge.
GST on Reverse Charge
Supply of services by a GTA who has not paid GST at the rate of 12% and services are provided to following persons are liable to reverse charge.
(a) Any factory registered under or governed by the Factories Act, 1948(63 of 1948)
(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
(c) any co-operative society established by or under any law
(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
(e) any body corporate established, by or under any law
(f) any partnership firm whether registered or not under any law including association of persons
(g) any casual taxable person
In all the categories which do not fall above, the liability to pay GST is on the goods transport agency only.
Place of Supply and Inter-State or Intra-State Supplies
As per section 7(3) of IGST Act, where the location of the supplier and the place of supply are in––
(a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory,
shall be treated as a supply of services in the course of inter-State trade or commerce.
And where the location of supplier and the place of supply are in same state or union territory then it is considered as intra state supply.
Place of supply in case of transportation of goods by road is determined as under.
(a) If supply is made to a registered person, the location of such person;
(b) If supply is made to a person other than a registered person, the location at which such
goods are handed over for their transportation.
Transporter’s duties for E-way Bill
If a transporter wants to transfer goods from one vehicle to another in course of transit then such transporter has to generate a new e-way bill in Form GST EWB-01 before such transfer.
Where the goods are transported from place of transporter to place of business and such distance is less than 10 km then details of such conveyance (Transporter to Business place) is not required to be furnished.
If transporter wants to transport multiple consignments in one vehicle then he may indicate a serial number of e-way bills generated in respect of each such consignment and a consolidated e-way bill in FORM GST EWB-02 may be generated before movement of goods.
If the consignor of goods has not generated e-way bill then the transporter has to generate Form GST EWB-01 on the basis of invoice or bill of supply or delivery challan, if the value of goods is exceeding Rs. 50,000.
The Commissioner may, by notification, require a class of transporters to obtain a unique Radio Frequency Identification Device (RFID) and get the said device embedded on to the conveyance and map the e-way bill to the RFID prior to the movement of goods.