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Rules for GTA and GST Implications

AMIT (B.Com) (155 Points)

12 August 2018

what are rules n regulation for transportation agency n gst rates n briefs pls tell me...

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Vinod Babu (24191 Points)
Replied 13 August 2018

Before starting our discussion on Goods Transport Agency (GTA), Let’s first understand that who is a GTA under GST. Well, the answer to this question is given in Para 2 of N/NO. 12/2017 CT(R) and N/NO. 9/2017 IT(R) dated 28/6/2017, and as per the above said notification GTA means any person who provides services in relation to transportation of goods by road and issue consignment note (builty) is a GTA.

The analysis of the above stated definition of GTA brings out one important point that only providing services in relation to transportation of goods is not a GTA. It must also issue a consignment note (builty) to qualify a GTA

After reading the above Para one question must arise in your mind i.e., why it is important to understand that who is a GTA? So, friends it is important to understand because services by way of transportation of goods by road except the services of:-

GTA

COURIER

Are exempt from GST vide (entry no. 18 of E/N 12/2017 CT (R) dated 28/6/2017). So, it is clear that services by way of transportation of goods by road by GTA is taxable in GST

Now there is another exemption to GTA’s which is if GTA provide services of transport in goods carriage of the following goods namely

1. Agriculture produce

2. Goods , where consideration charged for transportation of goods on a consignment transported in a single carriage does not exceed Rs. 1500/-

3. Goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs 750/-

4. Milk, salt, and food grain including flour, pulses and rice.

5. Organic manure

6. Newspaper or magazine registered with the registrar of newspaper

7. Relief material meant for victims of natural or man-made disaster, calamities, accidents or mishap or

8. Defence or military equipments

After reading the above stated paragraph it seems that the transportation of following goods by GTA are exempt (entry no. 21 of E/N 12/2017 CT (R) dated 28/6/2017)

Further, if Goods Transport Agency under GST provides services by way of transportation of goods to any unregistered person than the services of GTA are exempt Entry no. 21A of E/N/25/2017 CT (R) dated 28/6/2017.

Now, the question arises that when the services of GTA will be taxable. So, the services of GTA will be taxable if it provides to the following person i.e.,

1) Any factory registered under or governed by factories act 1948 or,

2) Any society registered under the society registration act , 1860 or under any other law for the time being in force in any part of India

3) Any co-operative society established by or under any law for time being in force, or

4) Any body corporate established, by or under any law for time being in force, or

5) Any partnership firm whether registered or not under any law including association of person

6) Any casual taxable person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act.

Rate of Tax for Goods Transport Agency under GST

The Government has prescribed two rate of tax for GTA i.e.

(a) 5% (In case of Reverse Charge) – The rate of 5 percent is subject to the condition that service providers have not taken input tax credit (ITC) for the tax charged on the goods or services used in supplying the service.

(b) 12% (In case of Forward Charge)

Person liable to pay tax under GTA

The GTA has the option to pay tax under Forward Charge @ 12% or under Reverse Charge @ 5%.

If GTA opts to pay tax under Forward Charge then it is eligible to take the ITC, but if it opts to pay tax under Reverse Charge then it is not eligible to take the ITC.

The option to pay tax under either of the above stated mechanism will be opted at the beginning of the year and once the option exercise will remain applicable for whole of the year.

Law related to GTA under Reverse Charge Mechanism (RCM)

( Section 9(3) of CGST ACT, 2017 read with N.No 13/2017 dated 28.06.2017.

As per S.No 1 of the above stated notification if GTA provide services in relation to transportation of goods to the following person located in taxable territory then there is an option to pay tax under RCM if recipient of such service is liable to pay freight.

1) Any factory registered under or governed by factories act 1948 or,

2) Any society registered under the society registration act , 1860 or under any other law for the time being in force in any part of India

3) Any co-operative society established by or under any law for time being in force, or

4) Any person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act. Or,

5) Any body corporate established, by or under any law for time being in force, or

6) Any partnership firm whether registered or not under any law including association of person

7) Any casual taxable person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST AcT

3 Like

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 13 August 2018

Mr Vinod nice explanation 👍

1 Like

Vinod Babu (24191 Points)
Replied 13 August 2018

Thank you Pankaj sir.

Sridevi (Accountant) (380 Points)
Replied 13 August 2018

Hi Mr.Vinod,

Read the explanation, and I have one doubt on the above said topic. We are procuring goods through GTA and he is charging 5% Tax. Can we claim the Input of 5%.

Regards

Sridevi

uma shankar khatri (proprietor) (132 Points)
Replied 13 August 2018

Mr. Vinod ji,

Very nicely explained the matter. Thanks a lot.

still I have some querry , Please reply & Oblidge.The matter is as under :

I am at Rajasthan, I purchased some material from Hyderabad, GTA issued Invoice with remark GST is payable by consignee - RCM. , GTA didn't charged any GST in Invoice, We got material , paid Freight without any GST as per the Invoice,.

Now we will have to issue Invoice under RCM, Who will be Supplier & Recepient , What will be Place of Supply, Date of Invoice ?, whether to charge IGST @ 5% OR CGST @ 2.5% & SGST @ 2.5% ? , When we View GSTR-2 A , the GTA has shown INVOICE & IGST @ 5%

Will we take ITC of this GST ?

Where will we enter this Invoice in Returns. In GSTR-1 in which Tables , in GSTR-3 B- in which Tables

Uma shankar

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 13 August 2018

NO YOU CANNOT TAKE ITC IF GTA CHARGED 5%

AS PER NOTIFICATION 22/2017 CT (RATE) : GTA CAN OPT TO PAY TAXES AT RATE OF 12% AFTER COLLECTING SAME FROM THE RECEIPIENT FURTHER IT WILL BE ALLOWED TO AVAIL ITC ON HIS INWARD SUPPLY

SO , THE RECEPIENT CAN AVAIL ITC ON GTA SERVICE IF HE CHARGE @ 12% GST

1 Like

uma shankar khatri (proprietor) (132 Points)
Replied 13 August 2018

Pankaj ji,

GTA has not charged from us, They have mentioned"GST payable by the consignee- RCM"

In GSTR-2A when viewing that , there it is mentioned IGST @ 5%. We will have to issue Invoice under RCM.

Uma shankar

uma shankar khatri (proprietor) (132 Points)
Replied 13 August 2018

Pankaj ji,

GTA has not charged from us, They have mentioned"GST payable by the consignee- RCM"

In GSTR-2A when viewing that , there it is mentioned IGST @ 5%. We will have to issue Invoice under RCM.

Uma shankar

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 13 August 2018

YES ,.. YOU HAVE TO DO RCM , IF GTA HAS MENTION 5% GST ON HIS BILL

uma shankar khatri (proprietor) (132 Points)
Replied 13 August 2018

PANKAJ JI,

On Invoice they have not mentioned GST @ 5%, They have just mentioned " GST is payable by consignee - RCM "

When we View GSTR-2A on GSTN portal there it appears GST @ 5% & amount of Tax as IGST .

Now question arises How should we prepare RCM Invoice ? Should we charge IGST OR CGST & SGST ? At what Rate ? , Name of Supplier -WHO ? Name of Recepient- WHO ? Place of Supply - ? , Date of Invoice ? And in which Tables of GSTR-1 & GSTR-3B we will fill details of This RCM Invoice ? ITC will be allowed to US ?

Please guide .

Uma Shankar

Sampada Avinash Thale (2 Points)
Replied 13 August 2018

Hii Vinod. I wish to purchase a property on 11th floor. The approved plan of building is for 13 floors. Builder has completed its 9 floor and has given possession to the buyers with partial oc. He has started 10th floor now. In this case, how to calculate the GST?? Whether I have to pay 12% or less as 65% building is completed?? Please guide in this regard. Thanking you, Sampada Joshi -Thale

RITESH KUMAR JAIN (CA IN PRACTICE) (118 Points)
Replied 27 March 2019

ABC Transport Co., a GTA Opted for FCM with input credit and charging 12% on freight amount. One day it provides trucks to another GTA for freight of Rs. 1 lac, which is exempts service as "providing of any means of transportation to GTA" is exempt. Whereas ABC Transport opted for FCM and probably condition is that it will pay 12% on all the receipts. Should ABC Transport Co. have to pay 12% on rs 1 lac whereas it is exempts service? Kindly clarify