The transportation and logistics industry is the backbone of our economy. Therefore, any issues that arise within the industry disturb the whole economy and the business vital part of the economy as any problem in transportation disrupts the business channel of the entire supply chain. It is one of the key reasons why hike in petrol has an across-the-board effect in disturbance of business. In this article, we will consider Transportation Agencies (GTA) and the requirements of GST relevant to them.
Transportation of goods in India
According to the National Highways Authority of India, approximately 66% of goods and 75% of commuter traffic moves on the roads. Trucking of goods is done via road is normally done by courier agency. Now we will discuss GTA and what services are exempted from GST.
Meaning of GTA
According to a notification dated 28th June 2017, central tax, GTA or “goods trucking agency” indicates any person who offers services in relation to the trucking of goods and gives a consignment note is bound to pay GST. It is an indication that whilst others may hire vehicles for the trucking of goods, only the ones who issue a consignment note are measured as a GTA. A consignment note is a vital condition to be thought of like a GTA.
An important document that is given and produced by GTA is known as the consignment note. It is issued against the unloading of goods for transporting the goods via road in the transportation of goods by a carriage. In this case, transportation of goods by truck safely are wholly the responsibility of the transporter.
A consignment note comprises of –
- Consignor’s name
- Goods carriage registration number
- Goods detail
- Place of Delivery
- The person responsible for paying GST
Trucking services exempted from GST
Only GTA goods and courier agencies are liable to pay GST and all the other trucking commodities are exempted. Some of the trucking agencies that are forced to pay GST are-
- A truck transportation agency
- Courier Company
- Via Inland Waterways
As a result, the truck transportation of goods via road continues to be exempted under the GST system.
Services offered by a GTA?
The service comprises of not only the truck transportation of goods but even other transitional services are given like-
- Loading of the goods
- Unloading of the goods
- Packing and unpacking of the goods
- Providing warehousing for the goods for short intervals
RATE OF GST
The rate of GST if the service is offered by GTA on the trucking of Goods that includes household goods or items of personal use is 5% that includes SGST 2.5% and CGST 2.5%.
Few exemptions are offered for specified goods
Following goods transported by a goods agency via road in a truck are exempted from GST-
- Products produced by way of forming.
- Those goods, where charges for the goods trucked in a single carrier is not more than Rs. 1,500.
- Items of kitchen use like rice, pulses, flour, milk products, food grains, and salt.
- organic manure that is used for farming.
- Magazines and newspapers that are registered with the Newspapers Registrar.
- When the country comes across a natural calamity the relief material is provided for the wounded or dead of natural or man-made adversities, accidents, calamities, or mishaps.
- When the defense system of the country has to be strengthened and the defense or military gears or other related equipment are transferred to different destinations.