GST for Road Transportation

GST regulations for Goods Transport Service

A popular method of goods transport in our country is through road. In accordance with the National Highways Authority of India, almost 65% of the total cargo and near about 80% passenger traffic is moved by means of road transport. The goods transport by road is managed by the transporters or courier agencies.   

What GTA {Goods Transport Agency} is all about?
According to notification No. 11/2017-Central Tax (Rate) on 28th June 2017, the GTA or “goods transport agency” represents an individual who offers service for goods transport by road together with issuing consignment note, by whatsoever name. You can also say that, whereas other people might also rent out vehicles for transportation of goods, only the ones who will issue a consignment note will be considered as a goods transport agency. Therefore, a note for consignment is an important condition to be measured as a GTA or goods transport agency.    

Which goods transport service is exempt under the Goods and Service Tax?
The goods transportation services are exempt by road apart from the following services:

  • courier agency 
  • goods transportation agency   

What is the GST rate on GTA?

Service by a GTA

GST rate

Goods transportation of 7 specified recipients*

12% with ITC (paid by GTA)
Or
RCM 5% with ITC

Carrying-
goods, where consideration charged for the goods transport on a consignment moved in a single carriage is < Rs. 1,500

0%

Goods transportation of unregistered casual taxable persons

0% **

Any other goods

5% No ITC 
OR
12% with ITC

Used household goods for personal use

0% **

 

 

Carrying-

  • agricultural produce
  • salt, milk & food grain together with rice, flour and pulses 
  • relief materials meant for victims of natural or man-made disasters
  • magazines or newspapers registered with Registrar of Newspapers
  • organic fertilizer 
  • defence or military gears 

0%

Transporting goods (GST paid by GTA)*

5% No ITC
or
12% with ITC

Transporting goods of unregistered persons

0% **

Hiring out vehicle to a GTA

0%

*As per Notification No. 20/2017-Central Tax (Rate) 22nd August, 2017
** As per Notification No. 32/2017- Central Tax (Rate) dated 13th October, 2017
While GTA hiring, the GST is paid by whom?        
 If a goods transport agency puts forward the services to specific trades, then the service recipient is liable to pay the goods and service tax under reverse charge.    
Under the GTA reserve charge, which trades are liable to pay GST?
The following service recipient trades are liable to pay the “Goods and service tax” under reverse charge:-

  • A GST registered person
  • Casual taxable person
  • Factory that is registered under the Factories Act,1948;
  • Society that is registered under the Societies Registration Act, 1860 or under some other law
  • partnership firm is registered or not (including AOP)
  • co-operative society established under any law;
  • body corporate established under or by any law;  

Who all are liable to pay under reverse charge?
In accordance with the notification no. 13/2017 [Central tax dated 28/6/17], the individual who is required to pay or pays freight for goods transportation through road in goods carriage territory, positioned in taxable province shall be taken as the service receiver.       

Payment by Sender
If the goods supplier or the consignor pays GTA, in this condition, the sender happens to be the recipient. In case he belongs to a category shown in the below given flow chart, then he will be liable to pay out good and services tax on the reverse charge basis.
Supplier [Consignor {pays GST under RCM} ]→Goods Transport Agency [GTA]→Recipient [Consignee] 

Payment by Receiver
In case the receiver [consignee] is liable to pay for the freight, then the goods receiver is considered as a receiver of transportation services. In case the person belongs to any of the given categories, then he will be liable to pay Goods and Service Tax on reverse charge basis.
Sender [Consignor]→GTA↔[pays] receiver [consignee]

GST reverse charge

The GST RCM or Reverse charge mechanism generally reflects that the goods and service tax is necessary to be paid and goods receipt to be deposited with the Government by the supplier for the same.

In accordance with the normal procedure of GST, the goods and services receiver is liable to pay the tax [GST] to the supplier and then this tax would be deposited with the government by supplier after availing the input tax credit benefit. On the other hand, under the RCM, the goods and service tax is paid and submitted through a receipt to the government authorities on behalf of the service provider.
You can get the details about normal goods and service tax procedure and the RCM or reverse charge mechanism below:

GST reverse charge mechanism validity  
The goods and service tax RCM is not valid for normal circumstances. The reverse charge mechanism will only be applicable just for the conditions that are particularly detailed under sections 9[4] and 9[3].

NOTE:     Section 9[4] RCM, that is for the transactions with dealers who are not registered, have been postponed till March 31st 2018. And, Section 9[3] RCM that is for transactions for particular services are applicable even now and reverse charge will continue to be charged.     

What is a Goods Transport Agency?

In accordance with Section 65B (26) of Finance Act, 1994; a Goods Transport Agency represents any individual who puts forward services in relation to the goods transportation by means of road and also issues the consignment note, by the concerned name. Consequently, in the Service Tax rule, the issuance of (C/N) or Consignment Note was vital, and a compulsory constraint sooner than any road transporter could be brought under the GTA domain.

GST [Goods and Service Tax] E-way Bill Regulations

GST E-Way Bill is a lately introduced technique for keeping a track of goods in transit introduced under the Goods and Services Tax. Any taxable individual registered under Goods & services tax and causing movement of consignment with worth of more than Rs.50,000 is obligatory to produce a GST E-Way Bill through the GST Common Portal.    

What exactly is the GST E-Way Bill?  
The GST [Goods and service tax] E-Way Bill is a document that is announced under the GST [Goods and service tax] plan for any sort of goods transport of load worth more than 50,000 Rupees.    

Any individual having a GST registration and transporting goods for any of the below-given reasons is liable to produce a GST E-Way Bill:

  • In relation to a supply;

In case a person who is liable to pay tax under the GST provides any kind of goods holding the worth of more than Rs.50,000, then a GST E-Way Bill is required to be generated.  

  • Reasons other than supply;

In case a person who is liable to pay tax under the GST plan moves goods from one storage space to the other and the goods hold a value above Rs.50,000, then a GST E-Way Bill is necessary to be generated.

  • Because of inward supply from an unregistered individual.

In case a person who is liable to pay tax under GST scheme acquires any commodities from an individual who is not registered under GST and the total consignment value exceeds Rs.50,000, then a GST E-Way Bill should be generated.       

Who can Generate GST E-Way Bill?

The GST E-Way Bill can be generated by the following categories of individuals:

  • who pays tax registered with GST,
  • a transporter  
  • An individual who is not registered under GST utilizing the GST Common Portal.  
  • For GST Registration Holders

In case a tax paying person is registered under the Goods and service tax requires goods transportation service using personal vehicle or the hired one as a seller or to be received in course of trade as a beneficiary, the taxable person can produce an E-Way Bill in Form GST INS-1 by electronic means through the GST Common Portal. The person requires providing all the details that are requested in Part B of FORM GST INS-01.  

  • For Transfer by Transporters   

In case a transporter is engaged in some Goods transport, then the taxpaying individual who is registered under the GST is required to get details about the consignment in Part B of FORM GST INS-01 on the GST Common Portal. By the use of these details, the transporter or the service provider would then produce a GST E-Way Bill on account of the details provided by taxable individual in Part A of FORM GST INS-01. The transporters have the permission to generate as well as carry an E-Way bill even if the goods hold the value that is less than Rs.50,000.   

  • For Transport by Unregistered Persons

Any unregistered individual moving goods to a tax paying person under GST can also create a GST e-way bill in FORM GST INS-01 through the GST Common Portal.

How to Generate GST E-Way Bill or EBN?  
The GST E-Way Bill can easily be created through the assistance of GST Common Portal by a tax paying individual who is registered with the GST, an individual who is not registered or some transport service provider.

On the submission of required credentials for the GST Common Portal in FORM GST INS-01, a unique EBN (e-way bill number) would be given to the provider, the receiver and the transporter as well.   

Any tax paying individual who is registered would be informed about the matter of a GST E-Way Bill or E-way bill number on the common GST portal. The registered person would hold the choice to agree with or refuse the shipment covered under the e-way bill.

In case a taxable person who is registered under goods and service tax does not make a statement of acceptance or rejection within the duration of 3 days of the information provided regarding the GST Common Portal, then the Bill would be taken as accepted. As a final point, all the accepted GST E-Way Bills would be prepared to accept mechanically on the GSTR-1 at the time of filing monthly GST Returns.

In case an unregistered person creates a E-way Bill, then the status of Bill would be texted to the registered contact number or else to the registered email address of the unregistered person.   

  • Validity of GST EWay Bill  

The GST EWay bill validity completely depends on the distance to which the consignment has to be transported. For instance, a GST e-way bill that is produced for goods transport for below 100 km is considered valid for a day.

The below given table defines the GST bill validity together with the distance given on the GST e-way bill.

GST E-way bill Validity

1000 km or more

15 Days

Less than 100 km

1 Day

500km or More --but--Less than 1000 km

10 Days

100 km or more—but—less than 300 km

3 Days

300 km or more—but—less than 500 km

5 Days 

    

  • Cancelling a GST EWay Bill

Once the GST E-Way Bill is created but the consignment was not moved or will not be moved, then the bill can easily be cancelled through the GST common portal or with the help of a GST Facilitation Centre within a day of generation of the e-way bill.       

Why GST EWay Bill is Required?  

The tracking of shifting and storage of the consignment is the key to minimize tax revenue outflow for the Government and decreasing black-market goods. Therefore, getting registered under goods and service tax has been made compulsory for all the warehouses, transporters and godowns.

To track goods while their transportation, the mechanism of GST e-way bill has been initiated by the Indian Government. Therefore, any of the transporter moving products is necessary to create a new e-way bill on the GST common portal in FORM GST INS-01 showing all details as well as the mode of transport.             

  • Credentials needed for Transport under GST  

Adding more to the GST E-Way Bill, an individual in-charge of delivery of goods is necessary to have the below-mentioned documents for the purpose of assessment by higher authorities at any point of time:   

  • The delivery challan or Bill of supply and invoice reference number through the GST common portal, acquired by uploading the copy of GST tax invoice given in FORM GST INV-1.
  • Copy of e-way bill or its number. It can be either physical or else mapped to a Radio Frequency Identification Device (RFID) that is rooted on to the means of transport used.   
  • GST E-Way Bill Rules  

The Draft for GST E-Way Bill regulations has been notified by the authorities. On the other hand, the finalized regulations have not been informed. The GST E-way Bill and e-way bill generation mechanism through the GST common portal is estimated to be introduced soon.           

What is GST

Serial No.

Existing [State-wise]

Status

Bihar

Communication has been issued specifying the new formats in form E-way Bill VII, E-way bill VIII, E-way bill IX and E-way bill X for E-way bills issuance.   

 

Andhra Pradesh

Same Forms 600 and 650 (for transports’) is applicable.

Madhya Pradesh

Only GST invoice and AWB is required

Gujarat

Till GST Eway bill rollout existing Form 402 will be applicable

Mumbai

NO Octroi, No N form , No R Form

Karnataka

E-sugam will exist, until E-wayBill is rolled out

Uttarakhand

Notification dated 30th stating shipments can move with GST invoice and Transport document

Assam

New notification received, which states till one week movement with GST invoice +AWB but soon state is planning to roll out "Inward Permit".

Uttar Pradesh ( UP)

E-way Bill discontinued in Uttar Pradesh vide Circular no. 1718015 dated 30 June 2017 till implementation of e-way bill rules under GST.
[bilty] Goods receipt and invoice mentioning name, address, GSTIN of Purchaser and Seller will be sufficient for smooth movement of Goods

Punjab

Form 36 for all shipments invoiced on or before 30th Jun is still being prepared

Kerala

Vehicles are getting cleared with E-declaration generated from Kerala GST site

Jharkhand

Waybills has been discontinued.

Orrisa

Notification dated 30th of Orissa local language stating shipment can move with GST invoice only. Communication has been issued by the authorities that requirement of waybills shall be postponed for 2 months.

Himachal Pradesh

Notification has been issued for issuance of waybills in new formats.