GST Provisions for Good Transport Agency

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June 16, 2019
All About GTA Under GST.

Goods transport support under GST registration

Transportation is an important part of the economy since any issue in transportation it can disturb the complete business channel. It is the reason the changes in petrol prices leave a far-reaching result in the interruption of business.

Roadways are the most popular form where goods are transported in India. According to the NHAI or National Highways Authority of India, about 80% of passenger traffic and 65% of freight traffic is passed by the roads.

Courier or transportation agency performs goods transportation.

What Is Exempt Under Gst And What Is The Importance Of Gst Registration?

Services by the transportation of merchandises are exempted:

  • By road except for goods transportation agency services and courier agency services
  • By inland waterways

The service of goods transportation by road remains to be excused even under GST rule. Remember, GST is implicated only on GTA that is goods transport agency.

What is GTA?
GTA or goods transport agency means any individual who provides services in means of transportation of merchandise by road and subjects consignment note. It means, some may hire vehicles for the sake of transportation but only the companies that are representing a consignment note is considered as GTA. Therefore, the consignment note plays an important part as per GTA.

What is meant by consignment note?
It is a document given by the GTA or goods transport agency besides the receipt of merchandise for transporting the merchandise by road in the carriage of the goods. When the transporter does not issue consignment note, the service provider does come under the GTA. If they have issued the consignment note, then it means the goods are moved to the transporter. The transporter remains responsible for the merchandise until it is safely delivered to the consignee.

Image That Represents The Concept of Goods Transport Agency.

The consignment note is numbered in serial and consists of the following details:

  • Name of consignee
  • Name of consignor
  • Details of the merchandises
  • Registration number of materials and goods carriage where the goods are being transported
    Description of the goods
  • Place of destination
  • Place of origin
  • Per responsible to pay GST- consignee, consignor or the GTA

Services offered by the GTA
Their service not only consists of actual conveyance of goods but also other ancillary or intermediate services like:

  • Loading and unloading
  • Packing and unpacking
  • Temporary warehousing
  • Trans-shipment, etc.

If the services are not offered as independent activities but included, they will be included under GTA.
There are multiple GST rates implied on passengers traveling via rail, air and road and also for the transportation of goods. It varies from zero to 18%. GST on passenger services has not much changed or increased the ticket prices of air, road, and rail. Most importantly, ITC or input tax credit is not applicable when GST on transport is charged. Check Out the more info about GST for goods transport agencies.

GST charges on transportation of commuters by air

The GST rates for air travel tickets are borne by passengers. It is as follows:

  • 5% GST is charged for economy level air tickets
  • 5% GST is charged for chartered flights tickets used for pilgrimage purpose
  • 12% GST is charged for business level air tickets
  • 18% GST is charged for chartered flights and aircraft rental services (without or with operator)

If you are traveling by flight for business purposes, you need to claim GST as ITC (Input tax credit) for your business. It is even possible for airlines to claim the input tax credit in terms of economy-level passengers. When traveling in business class, the input tax credit can be requested for spare parts, food items, and other excluding fuel.

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GST registration on Transport

GST charges for transportation of goods

When the goods are transported by rail, road, air or inland waterways, a certain sum should be paid as GST. It starts from zero GST. Some of the important goods which are GST exempt are as follows:

  • Rice, flour, salt, milk, pulses, and other food grains
  • Relief materials designed for sufferers of natural or manmade calamities, accidents, mishaps, etc.
  • Magazines or newspapers registered with the Newspaper Registrar
  • Defense or military equipment being transported
  • Agricultural products or produce and organic manure
  • If the total amount of goods transported is within INR 1500

Nil GST or exemption of GST is applicable in the following cases:

  • When the goods are transported for unregistered persons
  • Transport of household goods or personal use goods

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