Under GST laws, the definition of Goods Transport Agency is provided in clause (ze) of notification no.12/2017-Central Tax (Rate) dated 28.06.2017.
(ze) “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;
Thus, it can be seen that issuance of a consignment note is the pre-requisite condition for a supplier of service to be considered as a Goods Transport Agency. 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.
Individual truck/tempo operators who do not issue any consignment note are not covered within the meaning of the term GTA. The services provided by such individual transporters who do not issue a consignment note are exempted vide entry at Sl. No.18 of notification no.12/2017-Central Tax (Rate).
As per Rule 4B of Service Tax Rules, 1994, consignment note means a document, issued by a Goods Transport Agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage.
A consignment note is serially numbered and contains –
Name of consignor
Name of consignee
Registration number of the goods carriage in which the goods are transported
Details of the goods
Place of origin
Place of destination.
Person liable to pay GST – consignor, consignee, or the GTA.
Input Tax credit:
The recipient of GTA service discharging the tax liability is entitled to take Input Tax Credit (ITC) of the amount of tax paid under reverse charge, provided it is used in the course or furtherance of business at his end.
Further the recipient would be eligible for ITC of the GST paid by GTA on forward charge basis.
Person/’s Liable to GST under RCM:
As per Notification No. 13/2017- Central Tax dated 28/06/2017 the person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the receiver of service.
(a) Any factory registered under or governed by the Factories Act, 1948 (63 of 1948); or
(b) any society registered under the Societies Registration Act, 1860 (21 of 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; or
(d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or
(e) a body-corporate established, by or under any law; or
(f) any partnership firm whether registered or not under any law including association of persons; or
(g) any casual taxable person.
Notification no.12/2017-Central Tax (Rate) dated 28.06.2017 (Sl.No..21): The following services provided by a GTA (Heading 9965 or 9967) is exempt from payment of tax.
Services provided by a goods transport agency, by way of transport in a goods carriage of –
(a) agricultural produce;
(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 (Rs.1500);
(c) goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty;
(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 equipment.
Place of Supply for a GTA: [As per Section 12 (8) of IGST Act, 2017]
The place of supply of services by way of transportation of goods, including by mail or courier to––
(a) a registered person, shall be the location of such person
(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.