All about transportation of goods by Road under GST (updated)- Detailed discussion
Discussion on exemption notifications, GTA, ITC, RCM, Tax invoices and much more aspects.
Transportation of goods by road is backbone and a vital activity of the economy and any disruption in such activities may leads to major losses to the corporate and consequently may hit the economy.
Let's begin to understand everything about transportation of goods under GST regime -
What are the exemptions available for transporatation of goods under GST
As per S.no 18 of notification 12/2017- Central rate
Services by way of transportation of goods-
(a) by road except the services of—
(i) a goods transportation agency;
(ii) a courier agency;
(b) by inland waterways.
From the above exemption, all the service provided by way of transportation of goods are exempt from GST . GST is applicable only on services provided by Goods Transport Agency and courier agency*
*Courier agency - Means any person engaged in door-to door transportation of time-sensitive documents, goods or articles utilizing the service of a person. either directly or indirectly, to carry or accompany documents, goods or articles.
Definition of Goods Transport agency -
"Goods transport agency" means
any person who provides service in relation to transport of goods by road
issues consignment note, by whatever name called.
This is important to note that issuance of consignment note (Bilty) is very important characteristic of GTA.
Service provided by person who does not issue consignment note is not taxable
If driver of goods carriage is self employed either by taking vehicle on rent or as owner of one or two vehicles, he does not issue any consignment note, rather he has direct contract with consignor/consignee, he himself receives freight and hence he is not liable to service tax.
At the regime of service tax, various case laws has confirmed that there is no liability to pay service tax on the recipient of the service in cases of transportation undertaken by the individual truck perator and not by goods transport agencies. ( Case law - Shanti fortune Vs CC (2010) etc.)
Issues of bills by individual trucks owners is not consignment note. The transporter is not GTA. Hence service tax is not payable - (Kisan Sahkari Chinni Mills Ltd Vs CCE (2014)
Thus law needs to be interpreted keeping this aspects in mind.
Intention of government is to tax only services provided by transport booking agents.
What is a consignment note?
A consignment note is a document regarding the carriage of goods by road which declares the contract of carriage and includes the instructions given to the carrier and proves the contract of carriage.
Article 4 of the CMR states that the contract of carriage shall be confirmed by the drafting of a consignment note.
Once a consignment note has been drafted, then it's the responsibility of the transporter to deliver the consignment to the consignee within time and without any damage.
If a consignment note is not issued by the transporter, the service provider will not come within the ambit of goods transport agency.
Content of Consignment note
The matters which must be included in consignment note are the following -
(a) The date of the consignment note and the place at which it is made out;
(b) The name and address of the sender;
(c) The name and address of the carrier;
(d) The place and the date of taking over of the goods and the place designated for delivery;
(e) The name and address of the consignee;
(f) The description, regarding common use, of the nature of the goods and the method of packing, and, in the case of dangerous goods, their generally recognized description;
(g) The number of packages and their special marks and numbers;
(h) The gross weight of the goods or their quantity otherwise expressed;
(i) Charges to be paid by sender, receiver or third party.
Exemption provided to services of GTA sector -wise
2. As per S.no 21A of notification 12/2017- Central rate amended by CGST Notification rate 32/2017
Services provided by a goods transport agency to