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GST on Transportation

26 September 2017

we are a custom house agent we also provide transport service to our customer
we hire transport from third party and provide service to the customer. we raise a separate invoice for transportation services to the customer. kindly let us know what rate of gst is to be charged to the customer on the transport invoice

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14 Replies

SKumar (Manager) (385 Points)
Replied 26 September 2017

Has CHA separately issued a Consignment Note for the Transport Service?

Chhatra Singh Dugar (1464 Points)
Replied 26 September 2017

It is tax rate of goods you sent through transport is to be charged. In case recipient pays freight and transporter is GTA then it is 5% in reverse charge

1 Like

Renuka Salian (15 Points)
Replied 26 September 2017

can a cha raise a consignment note kindly confirm as we do not have any vechile of our own

Renuka Salian (15 Points)
Replied 26 September 2017

we have a profit element when we raise a invoice to our customer
in that case can we raise consignment note and not charge gst to the customer

Renuka Salian (15 Points)
Replied 26 September 2017

we have a profit element when we raise a invoice to our customer
in that case can we raise consignment note and not charge gst to the customer

SKumar (Manager) (385 Points)
Replied 26 September 2017

Yes, CHA can.

All major GTA transporters don't own all the vehicles that they operate. They hire from Individual truck owners.

If a consignment note is issued, it indicates that the lien on the goods has been
transferred (to the transporter) and the transporter becomes responsible for the goods till its safe delivery to the consignee.

Unless this transport is a very regular part of CHA activity and they understand legal risks, I would advise to avoid.

If CHA chooses GTA route they can issue invoice with SAC 996511 @ 5% GST and mark GST payable on reverse charge. So receiver will be liable to pay on RCM basis but they need not issue a separate document for it.

Renuka Salian (15 Points)
Replied 26 September 2017

sac code 996791 sac code 996511 what is the difference

SKumar (Manager) (385 Points)
Replied 26 September 2017

I stand corrected.

996791 is correct SAC for GTA service by Road transport.

RAJA P M ("Do the Right Thing...!!!") (127133 Points)
Replied 26 September 2017

(can a cha raise a consignment note kindly confirm as we do not have any vechile of our own)

Are you registered under GST for Transporter as nature of Business / HSN & SAC codes....?

If yes you can give separate consignment note / LR / Freight invoices

RAMESH KUMAR SINGLA (PROFESSIONAL) (1777 Points)
Replied 26 September 2017

if the CHA pays freight and the transporter is GTA, then the rate of GST is 5% without ITC that too under reverse charge. If the freight is paid by the consignee, and the transporter is GTA, the rate of GST is again 5% without ITC facility to the recipient under reverse charge. However, if the transporter is not GTA, the rate of tax is 18% as applicable on transport services falling under HSN 9965 Sl.no.9 item no. v of notification no. 11/2017-Central Tax (Rate), unless the same is exempted by some other notification.

Renuka Salian (15 Points)
Replied 27 September 2017

kindly let us know how we should raise the invoice

RAMESH KUMAR SINGLA (PROFESSIONAL) (1777 Points)
Replied 27 September 2017

I hope you are clear on tax to be charged. I presume that you are registered as GTA for providing transportation services. The rate of tax is 5% without any facilty of ITC.

Coming to the invoice part, the supply of CHA service and GTA together, does not make it composite service since both are not naturally bundled together. Therefore, you have the option to raise single invoice for CHA service and GTA. The tax rate applicable would be the higher rate as applicable on any of these two supplies. Further, the best course is to raise two separate invoices viz one for supply of CHA SERVICE AND another for supply of GTA.