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Yes, the Indian trucking business is expanding, hauling around 4.6 billion tons of freight every year. This is expected to increase to 9.6 trillion tonne-kilometers by 2050. With such development, companies and truck owners must comprehend the Goods and Services Tax (GST) to guarantee seamless operations and compliance. This blog looks at how GST relates to Goods Transport Agencies (GTAs) and truck owners, including rates, programs, and exemptions.
GST (Goods and Services Tax) is a comprehensive indirect tax paid on the sale of goods and services in India. While not necessary for everyone, firms must register for GST if their revenue reaches the following thresholds:
Normal States: Rs. 40 lakh yearly
Special Category States: Rs. 10 lakhs yearly.
The goods Transport Agency (GTA) carries items by road and provides a consignment note that serves as a receipt. GTAs link shippers to carriers and handle logistics including paperwork and insurance.
Key Services Offered by GTAs:
The goods Transport Agency’s (GTA) primary obligation when receiving items for shipment is to provide a consignment note. This document is serially numbered and normally issued to the consignor (sender), consignee (receiver), and transporter for proper record-keeping purposes.
A consignment note is a critical receipt that provides facts such as:
GST is applicable to services offered by registered Goods Transport Agencies. The responsibility for paying GST may rest with either the GTA or the service recipient, depending on the scenario.
In this case, the GTA is responsible for paying GST on the transport services they provide. This method allows GTAs to have greater control over their tax obligations and enables them to claim Input Tax Credit (ITC) for eligible expenses, such as fuel and vehicle maintenance.
Under FCM, two options are available:
5% GST without ITC:
12% GST with ITC:
GTAs are required to file the following GST returns:
In some cases, GST on transportation services is payable by the recipient under the RCM. Recipients are required to pay a 5% GST on the service value if they fall into specific categories, such as:
When the recipient pays GST under RCM, the GTA is not required to file GSTR-1 or GSTR-3B, as they are not directly handling GST payments. However, they may still need to file GSTR-9 (Annual Return) based on their yearly transactions.
Low-value goods: When the total cost of conveying a single cargo within a single carriage does not exceed Rs.1,500, the service is excluded from GST.
Consolidated Consignments: If the entire amount charged for shipping all items to a single consignee (receiver) is less than Rs. 750, the shipment is free from GST.
In India, the Goods and Services Tax (GST) applies to almost all purchases, including vehicles. When you purchase a new truck, a 28% GST is applied to the price. However, the good news is that this GST amount may be claimed as Input Tax Credit (ITC).
As a truck owner or small fleet operator, you may belong to one of the following categories:
Registered Business (FCM):
If you are not registered under GST, the Reverse Charge Mechanism (RCM) may apply in certain cases.
Renting a truck to a GTA is exempt from GST. This exemption applies even if you are a GST-registered business. In this scenario, the truck owner or fleet operator is not required to collect or pay any GST on the rental income.
Thankyou For Reading: A Guide to GST for Good Transportation Agency and Truck Owners
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Navata Road Transport, a road logistics service provider, established in the year 1982, now occupies a place of pride among the leading Road Transport Organizations in India. Navata is spread across a network of 668 branches in Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Odisha, Pondicherry, Maharashtra, Gujarat and Madhya Pradesh with ambitious further expansion plans pan India.
Navata Road Transport
D.NO.18-667, BOSE BUILDINGS,
KANURU, VIJAYAWADA – 520007
ANDHRA PRADESH.