Specifically exempt Good Transport Agency services under GST

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Good Transport Agencies are an important business as they facilitate the overall transport of goods. Transportation is an important part of the overall economy and as a result, the government has specifically exempt good transport agency services under GST. This means that GST Registration is not mandatory for Goods transport agencies and they have been provided certain exemptions. However, as per the recent notification from the government, these exemptions have been amended. Let’s understand the concept of specifically exempt good transport agency services under GST and the amendments in the exemption.

How do you define GTA?

As per the Finance Act of 1994, the GTA can be defined as Goods Transport Agency as an individual or a business entity that supplies transportation services through road and issues a consignment note.

Important Note: As per the definition, GTA is only that transportation service provider who also issues a consignment note. Consignment Note must be issued to consider transportation service providers as GTA.

What is a Consignment Note?

A Consignment Note is an important document that helps to prove that the Goods transport agency has received the goods. It essentially contains the details of the shipment and goods.

Implication of Consignment Note

Consignment Note implies that the consignee or the goods transport agency now becomes accountable for the safe delivery of the consignment or goods to the consignee or customer.

You can understand more about this at: What is the concept of Goods Transport Agency under GST? 

Previous Notifications on Specifically exempt Good Transport Agency services under GST

As per the notification No.12/2017-Central Tax (Rate) dated 28.06.2017, the GTA is exempted from the payment of the tax in case of services provided by a goods transport agency, by way of transport in a goods carriage of

  • Agricultural produce
  • goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage is less than one thousand five hundred rupees
  • goods, where consideration charged for transportation of all such goods for a single consignee is less than rupees seven hundred and fifty
  • milk, salt and food grain including flour, pulses and rice
  • organic manure
  • newspaper or magazines registered with the Registrar of Newspapers; (g) relief materials meant for victims of natural or manmade disasters, calamities, accidents or mishap
  • defense or military equipment.

Furthermore, the following services received by the GTA (Heading 9966 or 9973) is also exempt in terms of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017:

Services by way of giving on hire:

  • To a state transport undertaking, a motor vehicle meant to carry more than twelve passengers;
  • To a goods transport agency, a means of transportation of goods.

In simple words, If the GTA employs a vehicle for the transportation of goods, no GST is charged on those deals.

Latest Notification Amending GTA Exemptions under GST

As per the Notification No. 04/2022- Central Tax (Rate) dated 13.7.2022 the amendments have been made to the previous notification. The latest notification removes exemption as provided against Serial No. 21, in column (3), Clauses (b), and (c) by omitting these clauses.

Thus, starting from 18th July 2022 the following exemptions have been withdrawn:

  • The consideration charged on transportation of goods in a single carriage of GTA is less than Rs. 1500,
  • and the consideration charged for transportation of all goods for a single consignee is less than Rs. 750.

Thus, GTAs in above cases will have to pay GST.

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