Classification of service provided by Truck owner to GTA and their taxation under GST

Case-1

The assessee (Registered under GST - Main Business - Selling Cement) has provided his trucks (4 truck) to GTAs (No agreement exists) and earned freight on trip-by-trip basis.

The Assessee received NET amount from GTA after deduction for Cash paid to driver for trip expenses & diesel expenses from Total Agreed freight on distance basis.

Que. 1. What is the classification of this service & SAC ?

Que 2. Whether the amount of freight received after deduction from GTA is taxable ?

Que. How to declare in GST Return while filing by the assessee.

Case-2

In addition to above the assessee is also plying trucks for carrying goods to unregistered persons without issuing any documents.

Que.1. Whether amount of freight is taxable ?

Que.2 How to declare in GST Return while filing by the assessee.

Please provide answer with support of any order/ judgement etc

Hi Sunil,

Here's a detailed response based on GST laws and rulings regarding services by truck owners to GTAs and direct freight to unregistered persons:

Case 1: Truck owner providing trucks to GTAs (no agreement) and earning freight on trip basis

Q1. Classification & SAC Code:

The service of hiring trucks with operator to a GTA (Goods Transport Agency) is classified as “Renting of trucks with operator” or “Transport of goods by road service” depending on arrangement.
However, since the trucks are provided to a GTA who then undertakes transportation, the service is likely "Renting of trucks" service.
The SAC code generally applicable for renting of trucks with operator is 996712 (Goods transport by road services).
If trucks are provided without driver (operator), it would be "Renting of transport vehicles" under SAC 996721.

Q2. Taxability of amount received after deductions:

The entire freight agreed upon is the gross value of service.
Amount paid by GTA to driver and for diesel expenses are reimbursements or expenses incurred by the assessee, so these should be excluded.
The net amount received from GTA (after deducting driver's payment and diesel expenses) is the taxable value for GST.
The truck owner is liable to pay GST on the net amount received as service consideration.

Q3. How to declare in GST Return:

Declare the net freight received as taxable value under SAC 996712 in outward supplies (GSTR-1).
Input tax credit on GST paid on fuel/diesel may not be available if the truck owner is not registered for it separately, but expenses reimbursed by GTA should be excluded from taxable value.

Case 2: Assessee plying trucks directly for unregistered persons without issuing any documents

Q1. Whether freight amount is taxable?

Yes, freight charges for transportation of goods by road are taxable under GST, irrespective of whether the recipient is registered or unregistered.
The liability to pay GST is on the service provider (truck owner) if turnover exceeds threshold.
For unregistered persons, reverse charge mechanism does not apply here; supplier is liable to pay GST.

Q2. How to declare in GST Return?

The freight income from unregistered persons should be declared as outward taxable supplies under SAC 996712 in GSTR-1.
GST should be paid on the full freight amount received.
Even if no invoice is issued, the transaction is taxable and must be reported.

Supporting References / Judgements:

CBIC Circular No. 134/04/20-GST dated 10.07.20 clarifies the classification of transport services under GST.
The Goods Transport Agency (GTA) services are taxable under SAC 9967, but renting of trucks to GTA is renting service under 9967 series.
The Supreme Court & various High Court rulings affirm GST applicability on transport services irrespective of recipient registration.

Summary Table:

Case	Service Type	SAC Code	Taxability	GST Return Filing
1	Renting trucks to GTA	996712	Taxable on net amount received	Outward supply under 996712
2	Transport to unregistered persons	996712	Taxable on full freight amount	Outward supply under 996712