GTA under GST Act, GTA Exemption in GST, what is Goods Transport Agency, GTA GST rate, Ebizfiling

What is Goods Transport Agency (GTA)? Information on GTA under GST Act and GTA Exemption in GST

Any person who provides service in respect to the transportation of goods by road and issues consignment notes is referred to as a Goods Transport Agency (GTA). In this article information such as good transport under GST Act, GTA exemption in GST, what is Goods Transport Agency, GTA GST rate, and other information on GTA under GST Act will be discussed.

 

Introduction

The National Highways Authority of India (NHAI) recently revealed that transporters carry 65 percent of freight on the country’s roads. To conduct their business efficiently, they need to register their transport firm on the GST system, pay taxes according to the GSTIN, and follow government legislation. If a transportation services company is not GST-registered, it must first apply for a transporter ID on the E-way Bill Portal in order to create E-way bills in lieu of a GSTIN for transporting products. Before going through GTA under GST Act, let’s have a quick look at what is GST.

What is GST (Goods and Service Tax)?

Goods and Service Tax (GST) is an indirect tax applied in India on all types of enterprises that supply goods and services. This is a multi-stage tax levied by the government based on the destination of specific commodities and services in order to benefit the Indian economy.

What is Goods Transport Agency (GTA)?

A “Goods Transport Agency” or GTA is defined as “Any person who offers service in relation to the transportation of goods by road and issues consignment note, by whatever name referred to.” This means that, while others may rent out vehicles for goods delivery, only those who issue a consignment note are deemed GTAs. As a result, a consignment note is a need for being deemed a GTA (Goods Transport Agency).

Information on Goods Transport Agency (GTA) exemption in GST

  • Commodities that are conveyed in a single carriage and the consideration charged for the transportation of goods on it does not exceed 1,500 rupees.

  • Items being transported to a single consignee for a total of Rs. 750.

  • Agricultural yield.

  • Milk, salt, and grains of all kinds, such as wheat, rice, and pulses.

  • Manure that is organic.

  • A newspaper or publications that have been registered with the Registrar of Newspapers.

  • If relief supplies are being carried to victims of natural or man-made catastrophes, crises, accidents, or mishaps.

  • Defense or Military equipment.

What are the services that a GTA provides?

Not only does the service comprise the actual transportation of products, but it also covers additional intermediate/ancillary services such as-

  • Unloading/Loading,

  • Temporary warehousing,

  • Trans-shipment,

  • Packing/Unpacking.

These services are included under GTA (Goods Transport Agency) if they are incorporated and not performed as a separate activity.

What is the GTA GST Rate?

Below is the table that will explain the GST rate for all the Goods Transport Agency Services in India:

 

GTA Services

Tax Rate

Agricultural commodities, such as salt, milk, and food grains such as beans, flour, and rice, newspapers or magazines, organic manure,  registered with the Registrar of relief materials for victims of natural or man-made disasters, Newspapers, and defense or military equipment.

Nil

When the consideration charged for the transportation of goods on a consignment conveyed in a single carriage is less than Rs. 1,500, it is referred to as “carrying goods.”

Nil

Carrying goods for a single consignee where the total cost of transportation for all such products does not exceed Rs. 750.

Nil

Other Goods.

5% with no ITC or 12% with Input Tax Credit (ITC)

Any Household Goods for Personal Use.

0%

Transported goods for a person who is not registered.

Previously exempt, it is now taxable; the tax rate has not yet been announced.

Unregistered casual taxable people’s goods are transported.

Previously exempt, it is now taxable; the tax rate has not yet been announced.

Goods transported on which GST (Goods and Service Tax) is paid by GTA.

5% with no ITC or 12% with ITC

Goods transported to 7 specified recipients.

If the GTA charges 12%, the GTA must deposit the tax, and the ITC can be claimed. Otherwise, if the GTA charges 5%, RCM applies, and the recipient must deposit tax; ITC is not available.

Hiring Vehicle to GTA (Good Transporting Agency).

Nil

Which firms are subject to the reverse charge of GST for a GTA?

The following firms (service recipients) are required to pay GST under the reverse charge system

  • A society incorporated under the Societies Registration Act of 1860 or any other statute.

  • The Factories Act of 1948 was used to register the factory.

  • A cooperative society is formed under any legal authority.

  • A GST-registered individual.

  • Whether registered or not, a partnership firm (including AOP).

  • A legal entity created by or under any law.

  • A person who pays taxes on a regular basis.

Conclusion

The GST Law contains components of the current tax system. Pure transportation of goods services are often supplied by individuals in the unorganized sector, hence they are particularly exempt from the tax net, according to the law. Unless the GTA has opted to charge a forwarding fee, agencies providing transportation services are answerable to their recipients in most situations.

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Author: zarana-mehta

Zarana Mehta is an MBA in Finance from Gujarat Technology University. Though having a masters degree in Business Administration, her upbeat and optimistic approach for changes led her to pursue her passion i.e. Creative writing. She is currently working as Content Writer at Ebizfiling.

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