snpanigrahi

| Goods and Services Tax

Though there is no mention of GTA in the GST Act & Rules, however as
per Explanation to 9(iii) of Notification No. 11/2017-Central Tax (Rate),
Dt.: 28th June, 2017 & Paragraph 2 Clause (ze) to Notification 12-
2017 dated 28 June 2017, 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.
In the above definition following Two Aspects need to be discussed to
understand the scope of GTA services & responsibility.
1. Service in Relation to Transport
2. Consignment Note
Generally Transport Services also covers various other related services.
Therefore in the definition of GTA, phrases Service in Relation to
Transport used to broaden the Scope to cover not only Transportation,
but also all other services in relation to transport like loading /unloading,
packing /unpacking, transshipment, temporary warehousing, forward
distribution or any other such ancillary service etc.
In the definition GTA means, one who provide Transport & Transport
Related services as discussed above and who issues Consignment
Note. But Consignment Note is also not defined in any of GST Acts,
however reference may be drawn from Explanation to Rule 4B, Service
Tax Rules, 1994, a 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, which is serially
numbered, and contains the name of the consignor and consignee,
registration number of the goods carriage in which the goods are
transported, details of the goods transported, details of the place of
origin and destination, person liable for paying service tax whether
consignor, consignee or the goods transport agency.
Similar to above in a modified way Rule 54(3) of CGST Rules states
Where the supplier of taxable service is a goods transport agency
supplying services in relation to transportation of goods by road in a
goods carriage, the said supplier shall issue a tax invoice or any other
document in lieu thereof, by whatever name called, containing the gross
weight of the consignment, name of the consigner and the consignee,
registration number of goods carriage in which the goods are
transported, details of goods transported, details of place of origin and
destination, Goods and Services Tax Identification Number of the person
liable for paying tax whether as consigner, consignee or goods transport
agency, and also containing other information as mentioned under rule
46.
In the above rule, instead of word Consignment Note, phrases
Tax Invoice or any other Document in lieu thereof are used. In
this rule, the way and manner GTA should issue document (whether Tax
Invoice or any other document) is prescribed.
Whether GTA Services are Taxable Supplies?
Since GTA providing services in the course or furtherance of business
for consideration, therefore these services are considered as Supply as
per Section 7 of CGST Act, 2017,
Moreover as per Notification No. 12/2017- Central Tax (Rate), Dt:
28th June, 2017 Exempted Supplies
Entry No 18, Heading 9965
Services by way of transportation of goods-
(a) by road except the services of
(i) a Goods Transportation Agency;
(ii) a courier agency;
Therefore GTA services are Taxable Supplies.
Tax Options to GTA:
A Goods Transport Agent has following Three Options or we may say
three situations :
1. Providing Services to Specified Category Recipient Applicability of
Reverse Charge as per Notification No. 13/2017- Central Tax (Rate)
Dt : 28.06.2017
2. Services to other than Specified Category Recipient Forward
Charge @5% without ITC Rate of GST as per Notification No.
11/2017-Central Tax (Rate) Dt : 28th June, 2017
3. Forward Charging with ITC Availment Forward Charge @12%
availing ITC Notification No. 20/2017 Central Tax (Rate) dated
22ndAugust,
2017

Option 1 : Providing Services to Specified Category Recipient

Applicability of Reverse Charge
As per Notification No. 13/2017- Central Tax (Rate) dated
28.06.2017, Supply of Services by a Goods Transport Agency (GTA) in
respect of transportation of goods by road to Specified Category
Recipients are treated on Reverse Charge and the Recipient is
Liable to pay GST.
(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) any 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.
The applicable rate of GST as per Notification No. 11/2017-Central
Tax (Rate) Dt : 28th June, 2017, is @ 5% (CGST 2.5% + SGST
2.5%). Therefore the Recipient is required to pay GST @ 5% on
Reverse Charge Mechanism and of course the Recipient is allowed
to take Input Tax Credit (ITC) subject to general eligibility criterion.
Since GTA is not charging any GST, he is not entitled to any Credit.

Option 2 : Services to other than Specified Category Recipient

Forward Charge @5% without ITC
This situation shall arise if GTA is providing services to other than those
specified category recipients as discussed above such as to an
Individual / Proprietorship Firm/HUF. In such scenario GST shall be paid
by GTA itself on forward charge mechanism @ 5%. GTA is not allowed
to take any ITC.
Option 3 : Forward Charging with ITC Availment Forward
Charge @12% by availing ITC
As per Notification No. 20/2017 Central Tax (Rate) dated
22nd August, 2017, GTA are now allowed to take Input Tax Credit
subject to condition that they should charge GST @12% on forward
charge. The recipient is also allowed to take credit subject to his
eligibility. That means through this way seamless credit is ensured at the
GTA end as well as at recipients side. However, Once this option to
pay @ GST 12% and avail ITC is opted, then other Options cant be
exercised and thenceforth, GTA be liable to pay GST @ 12% on all
the services of GTA supplied by it.
This is a beneficial option especially for B2B transactions as GTA
can take credit of input taxes and charge the tax @ 12% which the
recipient also can avail tax credit.
Services Provided by a GTA Exempted :
As per 14th GST Council meeting held at Srinagar, J&K held on 19 May
2017 and Notification No. 9/2017-Integrated Tax (Rate), the 28th
June, 2017, Entry No : 22, Heading 9965 or Heading 9967 : Services
provided by a Goods Transport Agency, by way of transport in a
goods carriage of following are Exempted
(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;
(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 equipments.
Whether GTA to Register under GST? :
Let us discuss various scenarios as follows: In general if the GTA is
providing services which are all falls under Reverse Charge, then they
are not required to take registration. However in other cases they need
to register subject to conditions.
Case 1 : GTA Services only to Specified Category Registered
Business on RCM No Need to Register
In case GTA is providing whole of his services to only those Specified
Category Registered Businesses as specified in the Notification No.
13/2017- Central Tax (Rate) dated 28.06.2017, then the recipient is
required to pay GST on Reverse Charge. Further as per Notification
No. 5/2017- Central Tax dated 19/06/2017, which specifies that 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 said Act as the category of persons
exempted from obtaining registration under the aforesaid Act.
That means if the GTA is making all his supplies only on reverse
charge that is supplies to those specified category supplies as
discussed above, then GTA is exempted from obtaining registration
of GST.

Even though in case the GTA is supplying inter-state supplies, he

is not required to register under above situation as Notification No.
5/2017- Central Tax dated 19/06/2017, is overriding General Clause u/s
24 of CGST Act (Compulsory registration in case of Inter-State supply).
Case 2 : GTA Services to other than Specified Category
Registered Business or Other than Exempted GTA Services Need
to Register Subject to Threshold Limit
In case GTA is Providing Services to Categories other than Specified
under Notification No. 13/2017- Central Tax (Rate) dated 28.06.2017
& also Goods other than under Heading 9965 or Heading 9967
(Exempted Supply), then GTA is required to Register if the Threshold
Limit of Rs 20 L (Rs 10 L for Special Category States) is crossed or
making Inter-state Supply.
In case the threshold limit is less than Rs 20 L / 10 L as the case may be
and also not making any inter-state supply, then GTA is not required to
Register.
In a situation if the GTA is taken registration then he has two options
Pay GST @ 5% without taking ITC or pay @ 12 and avail ITC.
Case 3 : Exempted GTA Services Carrying only Specified Goods
No Need to Register
As per Notification No. 9/2017-Integrated Tax (Rate), the 28th June,
2017, Entry No : 22, Heading 9965 or Heading 9967 : Services
provided by a Goods Transport Agency, by way of transport in a
goods carriage of Specified Goods are Exempted. In case the GTA is
engaged in exclusively carrying those supplies then he is not required
to register by following Sec 23(1)(a) of CGST Act which stipulates that
person supplying wholly exempted good or services : not be liable to
registration.
That means GTA supplying exclusively to Specified Category
Recipients on Reverse Charge (as per Notification No. 13/2017-
Central Tax (Rate)) and / or exclusively carrying only Specified
Goods (as per Notification No. 9/2017-Integrated Tax (Rate)) need
not register.
Case 4 : GTA Opting to Pay GST @ 12% & Avail ITC Need to
Register
In case GTA opt to pay GSt @ 12% and avail ITC as per Notification
No. 20/2017 Central Tax (Rate), then he supposed to be registered.
The GTA opting to pay GST @ 12% under this entry shall,
thenceforth, be liable to pay GST @ 12% on all the services of GTA
supplied by it.
Exemption from RCM to Recipient :
Some relaxation is provided to recipients getting supplies from un-
registered. GST payable (under reverse charge) from unregistered
persons exempted if the aggregate value of such supplies from all
vendors does not exceed INR 5000 per day as per Notification : 8/
2017 Central Tax Rate, 28th June17. This provision is made to
exempt for small transactions up to Rs 5,000 per day.
Accordingly in case GTA is un-registered providing transport services to
registered person and the value of all such inward receipts by the
recipient is less Rs 5,000 per day then the recipient is not required to
pay on reverse charge.
Transport Who is Liable to Pay GST on RCM ?
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 person who receives the service for the purpose of this
notification
The person who is liable to pay will be the service recipient and he may
be either the consigner or the consignee.

Question : When should a tax invoice be issued for goods?

Answer: Tax invoice for goods shall be issued on or before the time of
removal/delivery of goods. In case of continuous supply of goods, it shall
be issued on or before the time of issue of statement of accounts
/receipt of payment.
Question : If goods are transported in semi-knocked
down condition, when shall the complete invoice be issued?
Answer: When goods are transported in semi-knocked down condition,
the complete invoice shall be issued before dispatch of the first
consignment. Delivery challan shall be issued for subsequent
consignments. Original copy of invoice shall be sent along with the last
consignment.
Exemption Notification for Hiring Services :
In case the owner of the Vehicle gives his vehicle on Hiring to GTA, then
the hiring charges are exempt from GST as per below
Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th
June, 2017, Heading 9966 or Heading 9973
Services by way of giving on hire
(a) to a state transport undertaking, a motor vehicle meant to carry more
than twelve passengers; or
(b) to a goods transport agency, a means of transportation of
goods.
Records to Maintain by GTA
As per Sec 35(2) of CGST Act : Every owner or operator of warehouse
or godown or any other place used for storage of goods and every
transporter, irrespective of whether he is a registered person or not,
shall maintain records of the consigner, consignee and other relevant
details of the goods in such manner as may be prescribed.
Further Rule 58(4) of CGST Rules states
Subject to the provisions of Rule 56,
(a) any person engaged in the business of transporting goods shall
maintain records of goods transported, delivered and goods stored in
transit by him along with the Goods and Services Tax Identification
Number of the registered consigner and consignee for each of his
branches.
(b) every owner or operator of a warehouse or godown shall maintain
books of accounts with respect to the period for which particular goods
remain in the warehouse, including the particulars relating to dispatch,
movement, receipt and disposal of such goods.
GTA Relevant Notifications
Notification No. 13/2017- Central Tax (Rate) Dt : 28.06.2017
Applicability of Reverse Charge on Supply of Services by a GTA in
respect of Transportation of Goods by Road to Specified Category of
Recipient
Notification No. 11/2017-Central Tax (Rate) Dt : 28th June, 2017
Notifies Central Tax Rates for services subject to condition mentioned
there in the notification. Sr No. 9(iii) of that para had prescribed 2.5%
Central Tax rate for Services of goods transport agency (GTA) in relation
to transportation of goods (including used household goods for personal
use) with the condition that credit of input tax charged on goods and
services used in supplying the service has not been taken. Thus
the effective rate for GTA was 5% with no ITC to the transporter.
Notification No. 20/2017 Central Tax (Rate) dated 22nd August,
2017
Amended Notification No. 11/2017 Central Tax (Rate) relating to the
rates for supply of services under CGST Act. In para (iii) of that
notification, Government has allowed an option to pay GST at the
central tax rate of 6% (With Full ITC) on Services of goods transport
agency (GTA) in relation to transportation of goods (including used
household goods for personal use). But in order to avail the option to
pay GST at 6%, a new condition has been prescribed which reads as
follows: Provided that the goods transport agency opting to pay
central tax @ 6% under this entry shall, thenceforth, be liable to pay
central tax @ 6% on all the services of GTA supplied by it.
Conclusion
> GTA Services are Taxable Supplies
> In case GTA Providing Services to Specified Category Recipient
Reverse Charge Applicable as per Notification No. 13/2017- Central
Tax (Rate) Dt : 28.06.2017
> Services to other than Specified Category Recipient Forward Charge
@5% without ITC Rate of GST as per Notification No. 11/2017-
Central Tax (Rate) Dt : 28th June, 2017
> Forward Charging with ITC Availment Forward Charge @12%
availing ITC Notification No. 20/2017 Central Tax (Rate) dated
22ndAugust, 2017. This option is beneficial for B2B transactions as
GTA can take credit of input taxes and charge the tax @ 12% which
the recipient also can avail tax credit.
> Whether GTA to Register
> GTA Services only to Specified Category Registered Business on
RCM No Need to Register
> GTA Services to other than Specified Category Registered Business
or Other than Exempted GTA Services Need to Register Subject to
Threshold Limit
> Exempted GTA Services Carrying only Specified Goods No Need
to Register
> GTA Opting to Pay GST @ 12% & Avail ITC Need to Register
> If GTA is unregistered person and providing services which
are subject to reverse charge then payment of reverse charge
is exempted if the aggregate value of such supplies from all
vendors does not exceed INR 5000 per day