I need clarification regarding the GST treatment of our goods transportation activity.
Our company is a Private Limited Company and GST registered. We have our own goods vehicles:
– 12 Wheeler – Passing Load 25 Ton
– 12 Wheeler – Passing Load 25 Ton
– 16 Wheeler – Passing Load 32 Ton
Our actual business activity is transportation of goods by road. We use our own vehicles to transport goods from the pickup location to the destination/drop location and receive transportation/freight charges for the service.
Our arrangement is as follows:
We do not rent or hire out our vehicles to customers.
We do not issue any LR/GR/Consignment Note.
We are not the owner or seller of the goods being transported.
We do not purchase or sell the goods.
We do not issue any sale invoice for the goods.
Our income from this activity is only from transportation/freight charges.
As per my understanding of the GST provisions and CBIC's GST FAQs, RCM under Section 9(3) is applicable to GTA services and not to ordinary transportation of goods by road. Further, transportation of goods by road by a person other than a GTA/courier is covered under the applicable exemption.
I also understand that the definition of Goods Transport Agency (GTA) specifically refers to a person who transports goods by road and issues a consignment note, by whatever name called.
Since we do not issue any LR/GR/Consignment Note and our activity is actual transportation of goods by road using our own vehicles, my understanding is that our service should fall under transportation of goods by road other than GTA/courier, rather than GTA service.
Accordingly, I understand that our transportation charges should be exempt from GST under the applicable GST exemption notification for transportation of goods by road other than GTA/courier.
Further, my understanding is that merely because the customer is GST registered or unregistered, the nature of our non-GTA transportation service should not change, since the GTA-specific RCM provisions would not apply to a non-GTA road transporter.
Our arrangement is also not a vehicle hiring/renting service, as we are providing the actual goods transportation service ourselves.
Therefore, based on the above facts, my understanding is that GST should not be applicable on our transportation charges and the service should be treated as an exempt non-GTA road transportation service.
CAclubindia
