GST ON GTA SERVICES
Applicability of GST Rate, Exemption and RCM on GTA services
1.1 Meaning of Goods Transport Agency (GTA)
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Clause (xxxx) of Notification No. 11/2017 - Central Tax (Rate) dated 28-06-2017 ‘goods transport agency’ means, - any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.] |
1.2 Clasification and SAC of GTA Services
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SAC |
Nature of services |
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Goods Transport Services |
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99651 |
Land transport services of Goods |
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996511 |
Road transport services of Goods including letters, parcels, live animals, household and office furniture, containers and the like by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles |
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996519 |
Other land transport services of goods nowhere else classified |
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996791 |
Goods transport agency services for road transport |
1.3 GST Rate on GTA services
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Clause (iii) of Entry 9 of Notification No. 11/2017 - Central Tax (Rate) dated 28-06-2017 GTA services in relation to transportation of goods (including used house hold goods for personal use) are taxable under |
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Reverse Charge Basis (a) GTA does not exercise the option to itself pay GS |
Forward Charge Basis (b) GTA exercise the option to itself pay GST |
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CGST rate = 2.5% GST Rate = 5% |
CGST rate = 2.5% GST Rate = 5% |
CGST rate = 6% GST Rate = 12% |
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ITC on inward supplies is not available [Refer Explanation no. (iv)] |
ITC on inward supplies is not available [Refer Explanation no. (iv)] |
ITC on inward supplies is available |
1.3.1 Exercise of option by GTA to pay GST itself in Annexure V
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1. |
From FY 2023-24 The option to itself pay GST on GTA services during a FY shall be exercised by making a declaration in Annexure V on or before the 15th March of the preceding FY. |
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2. |
From FY 2022-23 The option for the FY 2022-2023 shall be exercised on or before the 16th August, 2022] Invoice charging CGST may be issued during the period from the 18th July,2022 to 16th August, 2022 before exercising the option for the FY 2022-2023 but in such a case the supplier shall exercise the option to pay GST on its supplies on or before the 16th August,2022. |
1.4 Exemption on GTA services u/s 11(1)
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Notification No. 12/2017 - Central Tax (Rate) dated 28-06-2017 |
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S. No |
Heading |
Description |
Rate |
Condition |
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21. |
9965 or 9967 |
Services provided by a GTA, by way of transport in a goods carriage of - (a) agricultural produce; [i][(b) ***;] [ii][(c) ***;] (d) milk, salt and food grain including flour, pulses and rice; (e) organic manure; (f) newspaper or magazines registered with the Registrar of Newspapers; (g) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or (h) Defence or military equipments. |
Nil |
Nil |
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[iii][21A. |
9965 or 9967 |
Services provided by a GTA to an unregistered person, including an unregistered casual taxable person, other than the following recipients, namely: - (a) any factory registered under the Factories Act, 1948; or (b) any Society registered under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India; or (c) any Co-operative Society established by or under any law for the time being in force; or (d) any body corporate established, by or under any law for the time being in force; or (e) any partnership firm whether registered or not under any law including association of persons; (f) any casual taxable person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act. |
Nil |
Nil] |
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[iv][21B |
9965 or 9967 |
Services provided by a GTA, by way of transport of goods in a goods carriage, to, - (a) a Department or Establishment of the CG/ SG/ UT; or (b) local authority; or (c) Governmental agencies, which has taken registration under the CGST Act only for the purpose of deducting tax u/s 51 and not for making a taxable supply of goods or services. |
Nil |
Nil] |
1.5 Applicability of RCM on GTA Services
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S.N. 1 of Notification No. 13/2017-Central Tax (Rate) dt. 28-06-2017 |
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RCM on GTA services shall be applicable only if both the following conditions are fulfilled |
A. GTA provides services of transportation of goods by road to following recipient
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(a) |
any factory registered under the Factories Act; or |
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(b) |
any society registered under the Societies Registration Act, or under any other law for the time being in force in any part of India; or |
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(c) |
any co-operative society established by or under any law; or |
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(d) |
any person registered under the CGST/ IGST/ SGST/ UTGST Act; or |
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(e) |
any body corporate established, by or under any law; or |
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(f) |
any partnership firm whether registered or not under any law including association of persons; or |
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(g) |
any casual taxable person; and |
B. GTA does not exercise option to pay GST it self
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[v][2nd Proviso Nothing contained in this entry shall apply where (i) the supplier has taken registration under the CGST Act, 2017 and exercised the option to pay tax on the services of GTA under forward charge; and (ii) the supplier has issued a tax invoice to the recipient charging Central Tax at the applicable rates and has made a declaration as prescribed in Annexure III on such invoice issued by him.] |
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RCM will not be applicable on GTA services, if GTA has exercised the option to pay GST itself by making a declaration in Annexure-V as provided in clause (iii)(b) of entry 9 of Notification No. 11/2017 - Central Tax (Rate) dated 28-06-2017. |
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In such cases, GTA may pay gst (a) @ 5% without availing ITC. (b) @ 12% by availing ITC. |
1.5.1 Non applicability of RCM on GTA services to Government
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[vi][1st Proviso to above entry Nothing contained in this entry shall apply to services provided by a GTA, by way of transport of goods in a goods carriage by road, to, - (a) a Department or Establishment of the Central Government or State Government or Union territory; or (b) local authority; or (c) Governmental agencies, which has taken registration under the CGST Act, only for the purpose of deducting tax u/s 51 and not for making a taxable supply of goods or services.] |
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GST is not applicable on above GTA services, as it is exempt by entry no 21B in Notification No. 12/2017 - Central Tax (Rate) dated 28-06-2017 |
1.6 Conclusion on applicability of GST on GTA services
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GST payable on GTA services other than exempted services |
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Under Reverse Charge |
Under Forward Charge |
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GTA does not exercise option to pay GST itself |
GTA exercise option to pay GST itself in Annexure V |
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GST shall be paid by recipient @ 5% |
GST shall be paid by supplier (i) @ 5% without availing ITC (ii) @ 12% by availing ITC |
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Declaration in Tax Invoice [Rule 46] Tax is payable on reverse charge basis |
Declaration in Tax Invoice [Annexure III] I/we have taken registration under the CGST Act, 2017 and have exercised the option to pay tax on services of GTA in relation to transport of goods supplied by us during the Financial Year _____ under forward charge. |
1.7 Question & Answer
Question-1 [ICSI-E-D21-73-1]
In case of Goods Transport Agency (GTA) services, tax under CGST Act, 2017 is to be paid under forward charge basis where :
(A) GST is payable @ 12%
(B) GST is payable @ 5% and a factory registered under Factories Act, 1948 is the recipient of GTA services
(C) GST is payable @ 5% and an unregistered individual customer is the recipient of GTA service
(D) None of the above
Question-2 [ICAI-I-N18-10c(ii)-1.5] [ICAI-I-SM-Ch3-4]
'Safe Trans', a Goods Transport Agency, transported goods of Kapil & Co., a partnership firm, which is not registered under GST. Determine the person liable to pay tax in this case.
Answer
In case of services provided by GTA in respect of transportation of goods by road to, inter alia, any partnership firm whether registered or not under any law; GST is liable to be paid by such partnership firm. Therefore, in the given case, Kapil & Co. is liable to pay GST under reverse charge.
Question-3 [ICAI-I-N20-6b(i)-2]
Decide, who is liable to pay GST, if any. You may assume that recipient is located in the taxable territory. Ignore the aggregate turnover exemption available.
Veer Transport', a registered Goods Transport Agency (GTA) paying IGST @ 12%, transported goods by road of Dilip & Company, a sole proprietary firm (other than specified person) which is not registered under GST or any other Law.
Answer
In case of a GTA service, where GST is payable @ 5% and recipient is one of the specified recipients, tax is payable by the recipient of service under reverse charge. However, where GST is payable @ 12%, tax is payable under forward charge by the supplier of service. Therefore, in the given case, tax is payable under forward charge by "Veer Transport", a registered GTA.
Note In the given case, since the recipient of service is other than specified recipient, i.e., unregistered sole proprietorship firm, GTA service is exempt from GST. However, in the above answer, the said exemption has been ignored since the question specifically requires the students to ignore the exemptions, if any, available.
[i] Clause omitted by Notification No. 04/2022-Central Tax (Rate) dt. 13-07-2022 wef 18-07-2022. Earlier it read as
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(b) goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees; |
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