Taxability of Goods Transport Agencies (herein after referred as GTA) under GST era, will have a lots of confusion. So we are discussing the relevant provision and relevant notification issued till Dec'18 in detail.
1. Who is Goods Transport Agency (GTA) -
As per Para 2(ze) of Notification No 12/2017 - Central Tax (Rate) dated 28th June 2017 “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. Reverse Charge vs. Normal/Forward Charge
As per section 9(3) of CGST Act, 2017 tax on SPECIFIED CATEGORIES of supply of goods or services or both shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax.
As per Notification No 13/2017-Central Tax (Rate) dated 28th June 2017, GTA Service, will be under reverse charge if the recipient is
• Located in the taxable territory and
• One out of the 7 specified categories which is mentioned in the column no 4 of this notification.
In short 7 Specified recipients are Factory, Society, Co-operative Society, Registered person in GST, Body Corporate, Partnership Firm, and Casual Taxable Person.
3. GTA Service - Exempt Supply
GTA Service will be exempt in following three cases -
• Transportation for Specified purpose/goods -
Refer below Point No 4
• Recipient is not of 7 specified category - Refer below Point no 5
• Transportation of Goods by road other than GTA - Refer below point no 6
4. GTA Service is an Exempt Service for Specified Purpose/Goods - As per Sr No 21 of of Notification No 12/2017 - Central Tax Rate dated 28th June 2017, GTA Service will be exempted in the following cases -
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 Rs 1,500;
c) Goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs 750;
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 equipment.
5. Supplier is GTA but recipient is not any one out of 7 specified category
GTA Service will be under reverse charge only if the recipient is one, out of the 7 specified categories.
As per Notification No 32/2017 - Central Tax (Rate) dated 13th Oct 2017 a new serial number i.e. Sr. No 21A is added in the exemption Notifications No 12/2017 Central Tax (Rate). According to this serial no. if the recipient is not in the specified category then such transportation service will be an exempt service.
6. If the Supplier (Transporter) does not issue the consignment note
If the Supplier does not issue the consignment note (Bilty/Lorry Receipt by whatever name called) then such service of Transportation of Goods by Road (Like Tempo, Auto etc) will not be categorised as GTA Service and it is an Exempt Supply.
Why it is an Exempt Supply
As per Serial No 18 of Notification No 12/2017 - Central Tax (Rate) dated 28th June 2017 Service of Transportation of Goods by Road is an Exempt Service except by Goods Transport Agencies and Courier Agencies.
7. Will the GTA Service be always under Reverse Charge
From 22nd August 2017 vide Notification No 22/2017 Central Tax Rate, if GTA want to opt the forward charge/normal charge then he can opt provided such GTA has to charge the GST @12% (or 6% CGST +6% SGST).
Otherwise the GTA Service will fall under reverse charge subject to the condition that recipient should be one out of 7 specified category.
8. Who is the recipient
As per explanation (a) to Notification No 13/2017 Central Tax (Rate) dated 28th June’17, 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.
Also as per Section 2(93) of CGST Act “recipient” of supply of goods or services or both, means—
(a) where a consideration is payable for the
supply of goods or services or both, the person who is liable to pay that
(c) where no consideration is payable for the supply of a service, the person to whom the service is rendered,
9. If GTA is unregistered then RCM is applicable or Not-
According to Section 9(4) of CGST Act, if the Supplier is Unregistered and Recipient is registered then such registered recipient will pay the tax under reverse charge. This Section is suspended from 13th Oct’17 till 30th Sep’19 by following Notifications of Central Tax Rate.
Date of Notification
Suspension of Reverse Charge u/s 9(4) from 13th Oct'17 to 31st March’18
Suspension of Reverse Charge u/s 9(4) till 30th June 2018
Suspension of Reverse Charge u/s 9(4) till 30th September 2018
Suspension of Reverse Charge u/s 9(4) till 30th September 2019
Similar notifications were issued under Integrated Tax Rate as well.
However it is important to note that Goods Transport Agencies is falling under reverse charge by virtue of section 9(3) which is not suspended. Therefore even if the GTA is unregistered, still the recipient will be liable to pay the tax under RCM.
10. Reporting of GTA Transaction by Supplier and Recipient in GSTR 3B and GSTR 1
a. Reporting by the registered recipient of GTA Service -
- In GSTR 3B -
- Under Table 3.1.d ‘Inward Supply liable to Reverse Charge’ and
- then take the Input Tax Credit by reporting in the Table 4.A.3 (Inward Supply liable to reverse charge other than 1 & 2 above)
- In GSTR 1 - GSTR 1 is the details of outward supply however the GTA Service is the Inward Supply for the recipient therefore it will not be reported in GSTR 1 by the recipient.
b. Reporting by the Supplier of GTA Service -
In GSTR 3B - It will be reported as Outward Supply under GSTR 3B Table 3.1 (Ideally it should come under 3.1.a being the outward taxable supply however we will not be able to proceed the data if we put the taxable without putting the corresponding tax amount against the 3.1.a.
Therefore in my view we need to report under Table 3.1.(c)
In GSTR 1 -
- Under Table 4B if it is B2B (on which recipient is liable to pay the tax under RCM) or
- Under Table 8 - If it is exempt Supply (Like falling under serial no 21A of Notification No 12/2017
11. Rate of Tax
- Forward/Normal Charge - GTA will charge GST@ 12%
- Reverse Charge - Recipient will pay the tax @5% and eligible to take full input tax credit subject to the other condition of Sec 16 to 18 of CGST Act.
12. Service Accounting Code - Transportation of Goods by Road will have the SAC Code 9965 or 9967
13 Which Tax will be paid under Reverse Charge on GTA - IGST or CGST & SGST/UTGST
Please note that which tax need to be deposited is depends on two factors i.e. the location of Supplier (LOS) and Place of Supply (POS).
If LOS and POS are in same state/ Union Territory (UT) then the supply will be intra state (Section 8 of IGST Act) and CGST & SGST will be paid by the registered recipient under RCM.
Vice versa If LOS and POS are in two different state or two different Union Territory or in one state ot one UT then the supply will be interstate (Section 7 of IGST Act) and ICGST will be paid by the registered recipient under RCM.
Location of Supplier will be determined as per Section 2(71) of CGST Act and Place of Supply for transportation of goods by road is determined as per Section 12(8) of IGST Act which says that location of recipient if the service is provided to registered person.
Let take an example that Mr A is a registered person in Delhi and have purchased goods from Rajasthan. Goods are transported by road to Delhi by a transporter of Rajasthan. Therefore we can say that Location of Supplier is Rajasthan.
Now the recipient (being Mr A, as he is liable to pay the freight) is of Delhi. Therefore Place of Supply as per Section 12(8) is Delhi being the location of the recipient.
Therefore it is an Inter State Supply as per Section of 7 of IGST Act and Mr A will pay IGST under Reverse Charge.
14 Self-Invoice as per Section 31(3)(f) of CGST Act- As per Section 31(3)(f) a registered person who is liable to pay tax u/s 9(3) or Section9(4) of CGST Act shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered.
15. Payment Voucher as per Sec 31(3)(g) of CGST Act- A registered person who is liable to pay tax under sub-section (3) orsub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier.
To view the relevant extract of the notification : Click here