From the introduction of gst law in India, GST on GTA services hs remained a crucial issue. Through various notifications, circulars and clarifications, government has tried to resolve this issue.
But first we need to understand, what is a GTA i.e Goods Transport Agency.
As per Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017, “goods transport agency” or GTA means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.
This means, while others might also hire out vehicles for goods transportation, only those issuing a consignment note are considered as a GTA. Thus, a consignment note is an essential condition to be considered as a GTA.
There is different scenerios for gst taxability for GTA sevices.
Government has introduced reverse charge mechanism for GTA services subject to certain conditions.
In following case, reverse charge will be applicable on GTA services.
If GTA provides service of transportation of goods by road to following recipients, RCM is applicable :-
1. Any Factory registered under or governed by the Factories Act, 1948
2. Any Registered Society
3. Any Co-Operative Society established by or under any law; or
4. Any Company
5. Any Partnership Firm.
6. Association of person.
7. Any GST registered person.
Provided, GTA has not paid tax on such services @12% and has not availed ITC on goods and services used in supplying such services.
There is 2 option available to GTA –
a) Pay tax on forward charge basis @12% i.e 6% CGST & 6% SGST or 12% IGST and avail Input Credit.
b) Charge tax @ 5% i.e 2.5% CGST & 2.5% SGST or 5% IGST. Here GTA will not be able to claim ITC on the goods and services utilised by it to provide GTA services. Also tax will be paid on reverse charge basis if services are provided to above specified recipients.
