Meaning of Goods Transport Agency (herein referred to as ‘GTA’)

GTA has not been defined under the Central/State Goods and Services Tax Act, 2017 (herein referred collectively as ‘GST Act’) or the rules made thereunder. But, GTA has been defined in clause (ze) of notification no.12/2017-Central Tax (Rate) dated 28.06.2017 as ‘any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called’. Thus, two essential ingredients are (i) transport of goods by road and, (ii) issues consignment note. In simpler terms, if you’re a transporter and issuing consignment note then you will be called GTA.

Note: As per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 9/2017- Central Tax (Rate) dated 28.06.2017 all transport of goods by road are exempt other than the services of Courier Agency and GTA.

Must be wondering, (i) what is consignment note? and (ii) So, if the transporter does not issue consignment note then is it not a GTA?

Consignment Note

The consignment note has a history with the service tax regime; we may say the same concept is brought to the GST regime. The consignment note has not been defined under the GST Act and the rules made thereunder nor under the above-stated notifications. But, considering its history with service tax, we may safely define and understand consignment note. In the simplest term, consignment note evidence the lien on the goods being transferred to the transporter. This means, now the transporter is responsible for the goods for their safe delivery. It’s all about the ‘lien on the goods’, that is why the individual transporter/tempo doesn’t get involved with the lien and hence are exempt from GST. The answer to the second question is left to the reader’s wisdom.

GST Rate on GTA?

As per notification no. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by notification no. 20/2017- Central tax (Rate) dated 22.08.2017, GST on GTA services are tabled hereinbelow:

Sl No.	Chapter, Section or Heading	Description of Service	Rate (per cent.)	Condition
(1)	(2)	(3)	(4)	(5)

Heading 9965 (Goods transport services)

…………………………..

(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

Provided that credit of input tax charged on goods and services used in supplying the service has not been taken. [Please refer to Explanation no. (iv)]

Provided that the goods transport agency opting to pay central tax @ 6% under this entry shall, thenceforth, be liable to pay central tax @ 6% on all the services of GTA supplied by it.

Explanation No. (iv): 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.

Person liable to pay GST on GTA under Reverse Charge

If the GTA doesn’t opt for paying GST at the rate of 12% under the forward charge, then the recipient of the services has to discharge GST on GTA services under reverse charge. (understand forward and reverse charge under this post.)

As per notification no. 13/2017 – Central Tax (Rate) as amended from time to time, following recipient of the services has to pay GST on reverse charge basis.

Sl. No.

Category of Supply of Services

Supplier of service

Recipient of Service

(1)

(2)

(3)

(4)

Supply of Services by a goods transport agency (GTA) who has not paid central tax at the rate of 6%] 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

(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.

Provided that nothing contained in this entry shall apply to services provided by a goods transport agency, by way of transport of goods in a goods carriage by road, to, –

(a) a Department or Establishment of the Central Government or State Government or Union territory; or

(b) local authority; or

which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under section 51 and not for making a taxable supply of goods or services.]

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

(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.

As per the Explanation (a) of the above stated notification:

(a)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.

Exempted GTA Services:

As per S. No. 21, 21A and 21B of the notification no.12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time), the following services provided by a GTA (Heading 9965 or 9967) are exempt from payment of tax:

Sl. No.	Chapter, Section, Heading, Group or Service Code (Tariff)	Description of Services	Rate (per cent.)	Condition
(1)	(2)	(3)	(4)	(5)

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

21A

Heading 9965 or Heading 9967

Services provided by a goods transport agency to an unregistered person, including an unregistered casual

taxable person, other than the following recipients, namely: –

(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

(d) any body corporate established, by or under any law for the time being in force; or

(e) any partnership firm whether registered or not under any law including association of persons;

(f) any casual taxable 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.

Nil

21B

Heading 9965 or Heading 9967

Services provided by a goods transport agency, by way of transport of goods in a goods carriage, to, –

(a) a Department or Establishment of the Central Government or State Government or Union territory; or

(b) local authority; or

which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under Section 51 and not for making a taxable supply of goods or services.

Nil

You may reach the author at abhishek@gstivy.in

Disclaimer: The views expressed by the author(s) are personal and academic in nature. This blog post is not a substitute for professional legal advice.