Goods Transport Agency under GST

A Goods Transport Agency (GTA) plays a significant role in the logistics sector by providing transportation services for goods. Under the GST regime, GTAs are subjected to various compliance requirements to ensure accurate tax reporting and avoid penalties.

This article explores the essential aspects of GST for GTAs, including GST registration, reverse charge mechanism (RCM), HSN code reporting, and the latest updates under GST regulations.

Latest updates

January 2025
HSN reporting will be required for GTA services, specifically for those providing domestic and export transportation services. Businesses with a turnover above ₹5 crore must report 8-digit HSN codes.

What is a GTA?

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.

Watch and learn easily about GTA rules under GST-

Why GTA has to pay GST?

The GST law exempted below modes of transportation of goods: 

• By road, except the services of:
  • a goods transportation agency;
  • a courier agency
• By inland waterways.

Therefore, GST is applicable on Goods Transport Agencies (GTAs).

What are the services provided by a GTA?

The service includes not only the actual transportation of goods, but other intermediate/ancillary service provided such as-

• Loading/unloading
• Packing/ unpacking
• Trans-shipment
• Temporary warehousing etc

If these services are included and not provided as independent activities, then they are also covered under GTA.

What is the GST rate on GTA services? 

*As per Notification No. 20/2017-Central Tax (Rate) 22nd August, 2017 

** On 31st Dec 2018, The Government cancelled Notification No. 32/2017- Central Tax (Rate) dated 13th October, 2017, thereby making purchase from unregistered dealers taxable. However, the list of registered persons or transactions is yet to be notified.

^ Declaration must be given in Annexure - V by 15th March of the year before the financial year begins. The GTA must give below declaration while issuing invoices.

Is a GTA liable to register?

There was a lot of confusion about whether a GTA has to register under GST. As per Notification No. 5/2017- Central Tax dated 19/06/2017, a person who is engaged in making only supplies of taxable goods/services on which Reverse Charge Mechanism (RCM) applies is exempted from obtaining registration under GST.

Thus, a GTA does not have to register under GST if he is exclusively transporting goods where the total tax is required to be paid by the recipient under reverse charge basis (even if the turnover exceeds the threshold limit).

Also, if your GTA is GST registered, you can check the authenticity of the GSTIN using the GST search tool.

Scenarios for Registration for a Goods Transport Agency* 

* The threshold for GST registration has been increased to Rs.40 lakh for supplier of goods.

Who pays GST while hiring a GTA?

If a GTA provides the services to the certain businesses, recipient of services is required to pay GST under reverse charge.

Which businesses are liable to pay GST under reverse charge for a GTA?

The following businesses (recipient of services) is required to pay GST under reverse charge:-

• Factory registered under the Factories Act,1948;
• A society registered under the Societies Registration Act, 1860 or under any other law
• A co-operative society established under any law;
• A GST registered person
• A body corporate established by or under any law; or
• A partnership firm whether registered or not (including AOP)
• Casual taxable person

Who will pay GST under reverse charge mechanism?

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. 

Payment is by sender

If the supplier of goods (consignor) pays the GTA, then the sender will be treated as the recipient. If he belongs to the category of persons above then he will pay GST on reverse charge basis.

Payment by receiver  

If the liability of freight payment lies with the receiver (Consignee), then the receiver of goods will be treated as a receiver of transportation services. If he belongs to any of the above category of persons, then he will pay GST on reverse charge basis. 

Determining who is liable to pay GST in case of a GTA: Various scenarios

** GTA services to an unregistered person is exempted as per Notification No. 32/2017- Central Tax (Rate) dated 13th October 2017. However, this notification is cancelled as of 31st Dec 2018 and hence, tax must be paid under RCM for unregistered purchases on the notified list of supplies. However, the list is yet to be notified.  

Reverse charge if the GTA is unregistered

As per Notification No.32/2017-Central Tax (Rate) dated 28th June 2017, intra-state supplies of services or both received by a registered person from any unregistered supplier, was exempted from GST if it does not exceed Rs. 5,000 in a day. However, the Government has cancelled the notification and hence, RCM applies on unregistered purchases for only a specified list of supplies, which is yet to be notified.

Invoicing for GTA

Any GST compliant invoice of a GTA must have following details-

• Name of the consignor and the consignee
• Registration number of goods carriage in which the goods are transported
• Details of goods transported
• Gross weight of the consignment
• Details of place of origin and destination
• GSTIN of the person liable for paying tax whether as consigner, consignee or goods transport agency
• Name, address and GSTIN (if applicable) of the GTA
• Tax invoice number (it must be generated consecutively and each tax invoice will have a unique number for that financial year)
• Date of issue
• Description of service
• Taxable value of supply
• Applicable rate of GST (Rates of CGST, SGST, IGST, UTGST and cess clearly mentioned)
• Amount of tax (With breakup of amounts of CGST, SGST, IGST, UTGST and cess)
• Whether GST is payable on reverse charge basis
• Signature of the supplier

What is a consignment note?

A consignment note is a document issued by a goods transportation agency against the receipt of goods for the purpose of transporting the goods by road in a goods carriage. If a consignment note is not issued by the transporter, the service provider will not come within the ambit of the goods transport agency. 

If a consignment note is issued, it means that the lien on the goods has been transferred to the transporter. Now the transporter is responsible for the goods till it’s safe delivery to the consignee. 

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.

How to determine Place of Supply(PoS) for a GTA?

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.

Examples for determining place of supply

Rajesh is a registered dealer in Bangalore. He hires a GTA to deliver goods to Mumbai.
Place of supply will be Bangalore.  

Anita is an unregistered dealer in Gujarat who hires a GTA to deliver goods to Rajasthan. 
Place of supply will be Gujarat where Anita hands over the goods to the transporter.  

Vikas is registered in both Mumbai and Bangalore. He hires a transporter (based in Mumbai) to deliver from Bangalore to Delhi. 
CGST & SGST will be applicable. If the transporter is based in Chennai, then IGST will be applicable.

Payment of tax by a GTA

The payment of tax will be only through cash in the normal modes of card/netbanking/cash/UPI/IMPS (only for taxes upto Rs.10,000).

Input Tax Credit for GTA

If GTA pays GST

GTA has 2 options-

• 12% GST with ITC * 
  OR
• 5% GST with no ITC*

However, the GTA has to opt in to pay GST at the beginning of the financial year.  

*As per Notification No. 20/2017-Central Tax (Rate) 22nd August, 2017

If service receiver pays GST under RCM

Service receivers can always avail ITC on GST paid under RCM whereas the GTA cannot claim ITC in such cases.

Returns to be filed by a GTA

If all the services of the GTA fall under RCM then a GTA is not required to register. If a GTA registers, then it will have to file:

• GSTR-1 & GSTR-3B (Monthly or quarterly based on turnover)
• GSTR-9 (Annually)

Handling complex scenarios in GTA services

When transporting complex goods such as multi-modal transportation or bundled goods, reporting HSN codes accurately becomes essential.

Multi-modal transport

If multi-modal transport is involved (e.g., combining rail and road transport), each mode may require separate HSN reporting based on the nature of goods being transported.

Bundled goods

For bundled services, HSN codes for individual goods within the bundle must be accurately reported.

Specialised goods

For highly specialised goods, ensure the correct HSN code is mentioned.

Penalties for non-compliance with GTA provisions

Late filing fees

Failure to file GST returns on time will result in a penalty of ₹200 per day (₹100 CGST + ₹100 SGST), with a cap of ₹5,000.

Incorrect HSN reporting

Failure to correctly report HSN codes in GSTR-1 can lead to fines of up to ₹10,000 or the amount of GST evaded, whichever is higher.

Non payment of RCM liability

Non-compliance with RCM provisions can attract penalties and interest on the tax amount due, in addition to late fees.