GST for Goods Transport Services: A Comprehensive Guide

GST For Goods Transport Services

What is GST ?

GST stands for Goods and Services Tax. It is an indirect tax that has replaced numerous other indirect taxes in India, including excise duty, VAT, and service tax. The Goods and Services Tax Act was passed by the Parliament on March 29, 2017, and went into effect on July 1, 2017.

In other words, products and Services Tax (GST) is imposed on the delivery of products and services. The Goods and Services Tax Law of India is a comprehensive, multi-stage, destination-based tax that is levied on all value added. GST is a single domestic indirect tax regime that applies across the entire country.

GST On Transportation of Goods

Goods transported by air, rail, road, and inland waterways are subject to GST at an applicable rate beginning at nil. The following essential goods are free from GST on transportation :

Relief items are intended for victims of man-made/natural disasters, catastrophes, accidents, and so on.
Pulses, milk, salt, flour, rice, and other cereal grains
Agricultural produce and organic manure.
Military/defense equipment is being transferred
Newspapers and magazines registered with the Registrar of Newspapers.
If the total amount charged for goods transportation is less than Rs. 1,500.

Exemption or 0% GST on transportation is also available in the following cases:

Transportation of personal or home goods.
Transport of commodities by unregistered persons.

GST on the transportation of products by a GTA (goods transport agency) has the following tax rates :

5% GST on transit if ITC (input tax credit) is not claimed.
12% GST is applicable if ITC is availed.

Alternatively, the following GST rate may also apply:

18% GST is payable to the rental services of road vehicles, including trucks (with or without operator).
Rental services for freight aircraft (with or without operator) are subject to 18% GST.
18% GST applies to rental services of water vessels, including freight vessels (with or without operator).

Documents Required for GST Registration

To register GTA company under the GST umbrella, a transporter providing goods transport services must have the following papers on hand for verification on the GST website.

Aadhar card
PAN card (Permanent Account Number)
Details of your bank account
Copy of an electricity bill
Proof of address
Deed/document of ownership (in the case of owned property)
Property tax receipt
The owner’s consent letter/No Objection Certificate (NOC)
Lease/rent agreement (if the property is leased or rented)
Copy of the Municipal Khata
Other documents if asked

Who Should Register For GST?

E-commerce aggregators like Amazon, Shopify, and eBay.
Suppliers who supply via e-commerce aggregators
According to the reverse charge method, those who pay taxes
Agents representing input service distributors and suppliers
Non-resident individuals paying GST
Businesses with a turnover that exceeds the authorized threshold limit.
Individuals who registered before the GST law was implemented in India.

What is the GST Rate On GTA?

The Goods Transport Agency (GTA) is subject to two taxation rates. The accessibility of Input Tax Credits under GST influences GTA (ITC). Depending on the conditions, the goods transport agency may levy a rate of 5 % or 12 % GST.

The rate of GST on transport business under GTA is 5%, and the GTA is not authorized to claim input tax credits on goods and services utilized to provide services.
Under the advanced charge approach, the rate of GST on transport services under the GTA is 12 percent.
Any additional goods cost 5% without the ITC and 12% with the ITC for GTA.
GTA must submit the tax to claim ITC if it charges 12% for shipping items to 7 designated recipients. Alternatively, if the GTA imposes a 5% tax, the receiver is subject to the Reverse Charge Mechanism (RCM), which requires them to deposit tax and prevents them from claiming ITC.
Other GTA services, such as shipping agricultural goods, milk, beans, rice, wheat, newspapers, and magazines, are exempt from GST.
GST on transport services will not be applicable if the value paid for the transportation of goods on a consignment delivered in a single carriage is less than Rs.1500.
GST on GTA will not be levied if the amount charged for the transportation of commodities for a single recipient does not exceed Rs.750.

Thanks For Reading: GST for Goods Transport Services: A Comprehensive Guide