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All about GTA under GST

CA Sanat Pyne , Last updated: 21 March 2023  
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Introduction

Goods Transport Agency (GTA) is a term used to describe businesses that provide transportation services to transport goods by road. In the context of GST (Goods and Services Tax), GTA has a specific definition and is subject to specific rules and regulations. In this article, we will discuss the definition of GTA, its scope under GST and the compliance requirements for businesses that fall under the category of GTA.

All about GTA under GST

Registration of GTA

Under the Goods and Services Tax (GST) regime, every Goods Transport Agency (GTA) is required to register for GST.

The registration process for a GTA under GST involves the following steps:

  • Go to the GST portal: The first step in the registration process is to visit the GST portal 
  • Fill out the registration application form: The next step is to fill in the registration application form (Form GST REG-01) with the required details, including the legal name of the business, its address, email ID, and mobile number.
  • Provide the required documents: The applicant needs to provide certain documents, such as the PAN card, Aadhaar card, bank account details, and proof of address. The applicant also needs to provide proof of ownership or tenancy of the business premises.
  • Apply: Once the application form and documents are filled and uploaded, the applicant needs to submit the application form electronically.
  • Verification of application: The GST department will verify the application and the documents provided by the applicant.
  • Issue of registration certificate: Upon successful verification, the GST department will issue a registration certificate (Form GST REG-06) to the GTA.

The following documents are required for registering a GTA under GST:

  • PAN card of the business
  • Aadhaar card of the authorized signatory
  • Proof of address, such as electricity bill, telephone bill, or property tax receipt
  • Bank account details, including the name of the bank, branch address, and account number
  • Proof of ownership or tenancy of the business premises, such as a rent agreement or property documents
  • Photographs of the authorized signatory
  • Authorization letter or board resolution for the authorized signatory

GST rates for GTA

Under the Goods and Services Tax (GST) regime, the GST rates applicable to Goods Transport Agency (GTA) services depend on the nature of the goods being transported and the distance traveled.

  • For the transportation of goods other than petroleum products, the GST rate for GTA services is 12%.
  • For the transportation of petroleum products, the GST rate for GTA services is 5%.
  • For the transportation of goods by rail or vessel, GTA services are exempt from GST.

It is important to note that the GTA is required to pay the GST on the outward supply of services and cannot pass on the tax burden to the customer. However, the recipient of GTA services can avail of input tax credit (ITC) of the GST paid by the GTA, subject to certain conditions.

  • The conditions for availing ITC for recipients of GTA services are as follows:
  • The recipient must be registered under GST and must have a valid GSTIN.
  • The recipient must have received the services from a registered GTA.
  • The recipient must have paid the GST charged by the GTA.
  • The recipient must have received a tax invoice or a consignment note issued by the GTA.
  • The recipient must have filed their GST returns and must have accurately reported the details of the inward supply of services received from the GTA.
 

Accounting and record-keeping

As per the Goods and Services Tax (GST) regulations, Goods Transport Agency (GTA) service providers must maintain proper accounting and record-keeping of their business transactions. The following are the accounting and record-keeping requirements for a GTA under GST:

  • Invoices: GTA service providers must issue invoices for their services to their customers. The invoice must contain certain details such as the name and address of the GTA, the name and address of the customer, the date of the invoice, the place of supply, and the amount charged for the service.
  • Receipts: GTA service providers must issue receipts for the payments received from their customers. The receipt must contain certain details such as the name and address of the GTA, the name and address of the customer, the date of the receipt, the amount received, and the mode of payment.
  • Accounts: GTA service providers must maintain proper accounts of their business transactions, including all invoices, receipts, bills, and other documents.
  • E-way bills: GTA service providers must generate E-way bills for the transportation of goods. The E-way bill must contain certain details such as the name and address of the consignor and consignee, the registration number of the vehicle, the details of the goods being transported, and the place of origin and destination.
  • Records: GTA service providers must maintain all records related to their business transactions for at least 72 months from the date of the transaction. The records must be maintained in an electronic or physical form.
  • Audits: GTA service providers may be subject to audits by the GST authorities. Therefore, it is important to maintain accurate and complete records of all business transactions.

Proper accounting and record-keeping of business transactions are crucial for complying with the GST regulations and avoiding penalties for non-compliance. Therefore, GTA service providers must ensure that they maintain accurate and complete records of all business transactions, including invoices, receipts, bills, E-way bills, and other documents, and keep them for the required period.

E-way bill generation

As per the Goods and Services Tax (GST) regulations, a Goods Transport Agency (GTA) is required to generate an E-way bill for the transportation of goods. The following is the process for generating an E-way bill as a GTA:

  • Registration: A GTA must be registered under GST to generate an E-way bill.
  • Login: The GTA must log in to the E-way bill portal using their username and password.
  • Details of the consignment: The GTA must enter the details of the consignment such as the name and address of the consignor and consignee, the GSTIN of the consignor and consignee, the place of origin and destination, the description of the goods being transported, and the quantity and value of the goods.
  • Vehicle details: The GTA must enter the details of the vehicle transporting the goods, including the registration number of the vehicle.
  • Document upload: The GTA must upload the invoice or bill of supply related to the consignment.
  • E-way bill generation: After entering all the required details, the GTA can generate the E-way bill.
  • Validity: The E-way bill is valid for 1 day for every 100 km of travel or part thereof, from the date of generation of the E-way bill.
  • Verification: The E-way bill must be verified by the consignor or the consignee, or the transporter before the transportation of the goods.
 

It is important to note that the E-way bill is mandatory for the transportation of goods worth more than Rs. 50,000. However, there are certain conditions under which goods can be transported without an E-way bill. These conditions are as follows:

  • If the goods being transported are exempted from GST.
  • If the goods being transported are for personal use and not for sale.
  • If the goods being transported are being moved within a distance of 10 km from the place of business to a weighbridge for weighing or from the weighbridge back to the place of business.
  • If the goods being transported are being moved from the port, airport, air cargo complex, or land customs station to an inland container depot or a container freight station for clearance by customs.
  • If the goods being transported are being transported by a non-motorized conveyance.
  • In all other cases, it is mandatory to generate an E-way bill for the transportation of goods. GTA service providers must ensure that they comply with the E-way bill regulations to avoid penalties for non-compliance.

GST returns for GTA

Under the Goods and Services Tax (GST) regime, a Goods Transport Agency (GTA) is required to file three types of GST returns GSTR-1, GSTR-3B, and GSTR-9.

  • GSTR-1: GSTR-1 is a monthly or quarterly return that summarizes all the outward supplies made by the GTA. It contains details of the invoices issued during the month or quarter, including the invoice number, date, value of supplies, and GST charged. The due date for filing GSTR-1 is the 11th of the following month for monthly filers and the 13th of the following month for quarterly filers.
  • GSTR-3B: GSTR-3B is a monthly return that summarizes the GST liabilities of the GTA. It includes details of the total value of supplies made, the total value of purchases made, and the total amount of tax payable. It also includes any input tax credit claimed by the GTA. The due date for filing GSTR-3B is the 20th of the following month.
  • GSTR-9: GSTR-9 is an annual return that summarizes all the GST transactions made by the GTA during the financial year. It includes details of the supplies made, purchases made, and taxes paid. The due date for filing GSTR-9 is December 31st of the following financial year.

Liability and Penalties

Under the Goods and Services Tax (GST) regime, Goods Transport Agencies (GTAs) have certain liabilities and may face penalties for non-compliance with the GST regulations. The GST regulations require GTAs to register for GST, maintain records, file returns, and generate E-way bills, among other things. Failure to comply with these regulations may result in the following liabilities and penalties for GTAs:

  • Liability to pay GST: If a GTA fails to register for or pay GST on the services provided, they may be liable to pay GST along with interest and penalties.
  • Penalty for non-compliance: GTAs that fail to comply with the GST regulations may face penalties, including a penalty of up to Rs. 5,000 for each day of non-compliance or 0.25% of the total turnover of the GTA, whichever is higher.
  • Penalty for incorrect or delayed filing of returns: GTAs are required to file GST returns as per the prescribed timelines. If a GTA fails to file returns or files returns with incorrect information, they may be liable to pay a penalty of up to Rs. 10,000.
  • Seizure and confiscation of goods: If a GTA transports goods without a valid E-way bill or violates any other provisions of the GST regulations, the goods may be seized and confiscated by the tax authorities.
  • Suspension or cancellation of registration: The GST authorities may suspend or cancel the registration of a GTA if they are found to be non-compliant with the GST regulations.

In addition to the above, non-compliance with the GST regulations may also result in other legal consequences, such as legal proceedings, litigation, and reputational damage. It is, therefore, important for GTAs to comply with the GST regulations to avoid any liabilities and penalties. GTAs should maintain proper records, file returns on time, generate E-way bills, and comply with all other provisions of the GST regulations.

Input tax credit for recipients

Under the Goods and Services Tax (GST) regime, recipients of Goods Transport Agency (GTA) services can avail of input tax credit (ITC) subject to certain conditions. The following are the conditions that need to be fulfilled for availing of ITC on GTA services:

  • The recipient must be registered under GST and should have a valid GSTIN.
  • The GTA must have correctly mentioned the GSTIN of the recipient in the E-way bill.
  • The recipient should have received the goods transported by the GTA.
  • The recipient should have received a tax invoice from the GTA.
  • The recipient should have paid the consideration for the GTA services.

It is important to note that ITC can only be availed if the GTA has discharged GST liability on the services provided. The recipient should verify that the GTA has filed GST returns and paid the GST liability.

Another important condition for availing ITC on GTA services is invoice matching. The recipient should reconcile the details of the tax invoice issued by the GTA with the details of the E-way bill generated by the GTA. If there is any discrepancy between the tax invoice and the E-way bill, the recipient should communicate the same to the GTA within a specified time frame.

Conclusion

In conclusion, understanding the concept of GTA on GST is essential for businesses that provide transportation services for goods. It is important to comply with the regulations and maintain proper records to avoid penalties and interest charges. The GST rules and regulations for GTA are subject to change, and businesses need to keep themselves updated with the latest developments to ensure compliance.


Published by

CA Sanat Pyne
(F.C.A. & M.COM)
Category GST   Report

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