To be covered under
To be covered under GTA services a person needs to provide service in relation to goods transport by road AND issues consignment note (by what ever name called) by which lien on the goods transferred to the transporter and the transporter becomes responsible for the goods till its safe delivery to the consignee. Hence to be qualified as GTA the service provider should be necessarily a consignment note.
Individual truck/tempo operators who do not issue any consignment note are not covered within the meaning of the term GTA.
GAT is charged at the rate of 5% when in input was not availed by GTA, and the service received is liable to pay tax. However, the service received shall take input credit on GST paid. When the service is provided to unregistered person, GTA is liable to pay tax not the service receiver.
GST is charged at the rate of 12% when input was availed by GTA and the GTA itself is liable to pay tax not the service receiver.
No GST charged by GTA for transportation of specified goods like agriculture produce, milk, salt and food grains including flour, pulses and rice; organic manure; newspaper or magazines registered with registrar of newspaper; relied material meant for victims of natural or man-made disasters, calamities, accidents, or mishap; or defense or military equipment.
No GST charged by GTA where consideration charged for the transportation of goods in a single carriage does not exceed Rs. 1,500/- and transportation of all goods for a singly consignee does not exceed Rs 750/-.
No GST payable by GTA on hiring a means of transportation of goods to provide his output services.
The pure transportation of goods and services are mostly provided by person in the unorganized sector hence has specifically excluded such operators from the tax net. In respect of those who provide agency services in transport, the liability is case on the recipients in most of the cases or unless option to pay under forward charge has been exercised by the GTA.
Frequently Asked Questions?
1.As per Notification number 05/2017-Central Tax dated 19th June, 2017, the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the CGST Act, 2017 are exempted from obtaining registration under the said Act. Please clarify whether a GTA providing service in relation to transportation of goods by road under reverse charge mechanism (RCM) can avail of the benefit of this exemption.
Answer:: Yes, a GTA providing service in relation to transportation of goods by road under RCM can avail of the benefit of this exemption
2.: Can a GTA obtain registration for one vertical (Rail, Cargo, Renting, Warehousing etc.) for which tax needs to be paid while not obtaining registration for another vertical (GTA under RCM) on which there is no tax liability.
Answer: No, because the business entity is not engaged exclusively in the supply of services liable to tax under reverse charge mechanism.
3. Please clarify whether input tax credit is available to the recipient of service, when the GST paid by him is at a concessional rate of 5% under RCM.
Answer: Yes, input tax credit is available in such cases.
4. When a GTA hires a truck (with driver) from another GST registered entity for the purpose of providing goods transport service to a registered recipient, whether tax credit is available to the GTA on the GST paid by him to the owner of the truck registered under GST.
Answer: Services by way of giving on hire to a GTA, a means of transportation of goods are exempt from GST under Notification number 12/2017-Central Tax (Rate) dated 28th June 2017. When the tax is not payable, the question of taking any tax credit does not arise.
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