Good transport agency

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This discussion clarifies the Goods Transport Agency's (GTA) Goods and Services Tax (GST) liability when hiring trucks from the market and sub-hiring them to companies. While services of providing transportation of goods on hire to a GTA are exempt, the GTA itself faces GST liability on hire charges received. The applicable rates are 5% without input tax credit or 12% with input tax credit. GTAs can opt to pay GST under forward charge or shift the liability to the service recipient via Reverse Charge Mechanism (RCM) at 5%.

Manoj

Manoj (Querist)

26 January 2022 If GTA takes on hire trucks from market and gives on hire to various companies. Then in this case Whether any liability of gst arises on GTA on the hire charges received from various company.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

26 January 2022 Services by way of giving on hire, a means of transportation of goods to a GTA are exempt from tax.
18% liability of gst arises on GTA on the hire charges received from various companies.

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R. B. Yadav (CMA, LLB)

R. B. Yadav (CMA, LLB) (Expert)

27 January 2022 If GTA hire the trucks from market, it is exempt under notification 12/2017. But when GTA(registered party) receive hire charges from service recipient, transaction is liable for GST at the rate of:-
i) 5% without claiming input tax credit on the input or input service
ii) 12% with the claim of input tax credit.

GTA have option to pay the GST under forward charge at the rate specified above or can shift the liability on service recipient and recipient will deposit the liability @5% under RCM.

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