GST for Goods Transport Agency

Entities operating a Goods Transport Agency have to pay special attention to GST rules and regulations. Goods Transport Agency would not only have to obtain GST registration and

file GST returns, but they must also generate e-way bill while transferring goods and comply with various other GST regulations. In this article, we look at the applicability of GST for Goods Transport Agency.

GST Registration

GST registration is mandatory in India for entities having more than Rs.20 lakhs of aggregate turnover in a year (Rs.10 lakhs in the Special Category States). However, some of the supplies provided by a goods transport agency would be liable for GST under reverse charge basis. In a reverse charge transaction, the recipient of the goods is made liable for the payment of GST. Hence, while providing services, goods transport agency must be aware of the reverse charge mechanism and raise invoice accordingly. While calculating aggregate turnover to determine criteria for GST registration, the law mentions that “aggregate turnover” means the total value of all taxable supplies, not including the value of inward supplies on which the tax payable by a person based on reverse charge basis, exempt supplies, exports of goods or services or together and inter-state supplies of persons with the identical Permanent Account Number, calculated on an all-India basis but leaves out Central tax, State tax, Union territory tax, Integrated tax as well as cess. Further, according to Notification No-5/2017 of Central Tax as reproduced below, persons engaged ONLY in providing supply wherein tax is paid on a reverse charge is exempted from GST registration.

Open PDF in new tab

Hence, goods transport agencies involved in purely providing services taxable on reverse charge basis need not obtain GST registration. On the other hand, any goods transport agency having to collect and remit GST must obtain registration and comply with GST regulation once the aggregate turnover crosses the threshold limit. In addition to GST registration, all

transporters and warehouses are required to be registered under GST mandatorily. Hence, it is important for all goods transport agencies to be registered and aware of GST regulations. Learn about the GST Guide for traders to gain better knowledge and ensure GST compliance!

Persons Required to Pay GST on Reverse Charge

When taking the services of a goods transport agency, the following types and class of entities shall pay the tax on reverse charge basis:

Factories registered under the Factory Act.
Societies registered under the Society Act.
Any co-operative society.
Any person registered under GST.
Any Body Corporate (Company or LLP)
Any partnership, if registered or not as well as AOP.

When should the Goods Transport Agency collect GST?

When a goods transport agency provides services to an individual or proprietorship firm or HUF or persons not registered under GST, the Agency must collect GST, if it has GST registration.

However, under GST, the Ministry provides an exemption to subsequent services provided by GTA by means of transportation of goods carriage of:

Agriculture produce milk, salt as well as food grain together with flour.
Pulse as well as rice
Organic Manure
Newspaper otherwise magazine
Relief Material
Defence otherwise military equipment
Wherever gross amount charged for a single consignment transported in a single carriage does not be in excess of Rs. 1,500.
Wherever gross amount charged for all goods of single consignee does not be in excess of Rs. 750.

Visit IndiaFilings.com for GST registration.

Back to Learn

Frequently Asked Questions

Common questions about GST for Goods Transport Agencies.

A Goods Transport Agency must obtain GST registration if their aggregate annual turnover exceeds Rs. 20 lakhs (Rs. 10 lakhs in special category states). However, if they are only providing services where the tax is paid on a reverse charge basis, they are exempt from GST registration.

Under the reverse charge mechanism, the recipient of the transport service is liable to pay the GST instead of the Goods Transport Agency. This applies when the transport services are provided to registered entities like companies, factories, societies, partnerships, etc.

A Goods Transport Agency with GST registration must collect GST from individuals, proprietorship firms, HUFs, or unregistered persons who receive their transport services.

Yes, there are exemptions for transport services involving agricultural produce, milk, salt, food grains, pulses, rice, organic manure, newspapers/magazines, relief materials, and defense/military equipment. There are also exemptions based on the consignment value.

Yes, it is mandatory for all transporters and warehouses to be registered under GST, irrespective of their turnover.

The aggregate turnover is calculated as the total value of all taxable supplies, excluding the value of inward supplies on which tax is paid on reverse charge, exempt supplies, exports, and inter-state supplies with the same PAN.

Goods Transport Agencies must generate an e-way bill while transferring goods, as it is a crucial GST regulation to track the movement of goods and prevent tax evasion.

Yes, Goods Transport Agencies must also file GST returns, issue proper invoices (mentioning reverse charge applicability where required), maintain records, and comply with other GST regulations as applicable.

Yes, a Goods Transport Agency can provide services without GST registration if all their services are taxable on a reverse charge basis, and the recipients are responsible for paying the GST.

The reverse charge mechanism in GST for Goods Transport Agencies ensures that the tax is paid by the recipient (registered entity) instead of the supplier (Goods Transport Agency), as the recipient has better compliance capabilities and can claim input tax credit.