Goods Transport Agency Under GST

The Goods Transport Agency under GST is liable for transporting goods from one location to another to help the sender and receiver of goods. The place of supply determines the GST rate applicability for transporting such goods.

Further, the GST liability varies based on the aggregate annual turnover of GTA, registered or unregistered dealers. Here is a comprehensive overview of GST liability applicable on inter-state and intra-state goods transport to comply with Indian tax laws.

What Is a Goods Transport Agency (GTA)? 

Goods Transport Agency (GTA) is a company liable to transport goods by road. Central Tax (Applicable Rate) notification highlights that the GTA needs to arrange the transportation of goods from one place to another by road by issuing a consignment note.

What Is a Consignment Note?

When the Goods Transportation Agency (GTA) receives goods for road transportation, it issues consignment notes as a formal document. This note is a proof of contract between the consignor and the GTA.

Here are the details included in a consignment note:

● Unique serial number

● Names of the consignor and the consignee

● Details of vehicle registration

● Description of goods

● Origin and destination places

● Details about the person liable to pay the service tax (consignor, consignee or GTA)

What Are the Services Provided by GTA? 

The services provided by GTA are as follows:

● Transportation Arrangement: The GTA is liable to coordinate the movement of goods from the consignor to the consignee.

● Loading and Unloading: The company is liable to handle the physical movement of goods.

● Tracking and Tracing: The GTA is liable to track and trace the goods based on shipment location and movement.

● Insurance (Optional): The company can choose to assist with insurance and customs clearance wherein it deals with import or export procedures.

● Issuing Consignment Note: For each shipment, the GTA needs to issue a consignment note.

● Vehicle Management: The GTA is responsible for arranging vehicles and ensuring that vehicles are available for goods transportation.

List of GTA Services with a 0% Rate of GST in 2025

The following table illustrates the GTA services with a 0% GST rate:

SAC Code	Description of GTA Service for Various Purposes	GST Rate
9965	GTA services for transporting goods (including used household goods for personal use)	0%
9965 or 9967	GTA services to agricultural produce	0%
9965 or 9967	GTA services to milk, salt, and grains (including flour, rice, pulses)	0%
9965 or 9967	GTA services to organic manure	0%
9965 or 9967	GTA services to newspapers/magazines	0%
9965 or 9967	GTA services to relief materials for victims of natural or man-made disasters	0%
9965 or 9967	GTA services to defence/military equipment	0%
9965 or 9967	GTA services to unregistered persons (including an unregistered casual taxable person)	0%
9965 or 9967	GTA services to Central Government departments/establishments	0%
9965 or 9967	GTA services to State Government departments/establishments	0%
9965 or 9967	GTA services to Union Territory departments/establishments	0%
9965 or 9967	GTA services to Local authorities or Governmental agencies (registered only for TDS under the CGST Act)	0%

List of GTA Services with a 5% to 18% Rate of GST in 2025

The following list presents the GTA services with a 5% to 18% GST rate:

SAC Code	Service Description	CGST	SGST or UTGST	IGST	Conditions
9965	The GST liability is not with GTA	2.5%	2.5%	5%	No input tax credit is available
9965	GTA has a GST liability	2.5% or 6%	2.5% or 6%	5% or 12%	No input tax credit is available for GTA services taxed at 2.5%.
9967	Additional services in transport (Excluding GTA services which fall under SAC code 9965)	9%	9%	18%	–

What Goods Transportation Services Are Exempt from GST?

Here are the goods transportation services exempt from GST:

● Transportation of goods using inland waterways or roads (excluding the GTA services or services rendered by a courier agency)

● Goods transportation, including grains, milk, manure, and others

● Transportation of goods via a single carriage below the specified threshold of ₹750 or ₹1,500

What Was the Situation Under Service Tax?

Reverse Charge Mechanism remained applicable under the service tax regime, similar to the GST regime. However, the rules were as follows:

● 40% of the value of supplies was taxable with abatement for 60% of the value, for transportation of used household goods

● 30% of the value of transportation of general goods was taxable with a 70% abatement

When Does a GTA Need to Register?

Under the following conditions, GTA has to register under GST:

● If the annual turnover exceeds ₹20 lakhs for states excluding special category ones

● In case the aggregate annual turnover is more than ₹10 lakhs for special category states

Notably, if the services are categorised under the Reverse Charge Mechanism, the GTA need not register under GST.

Scenarios Requiring GTA Registration for GST

The tables below illustrate the scenarios for GST registration for GTA:

Scenario 1:

Here is the first scenario for GST registration:

Service	Turnover	GST Payer
If it transports goods of a registered dealer or other seven entities	₹9 lakh	Registered dealer or service recipient under Reverse Charge Mechanism
In case it transports goods of an unregistered dealer (URD)	₹5 lakh	GTA has a tax liability
Total Turnover	₹14 lakh	Since the aggregate annual turnover is less than ₹20 lakh, GTA need not register under GST.

Scenario 2:

Here is the second scenario illustrating the need for GST registration for GTA:

Service	Turnover	GST Payer
If the GTA transports goods of a registered supplier	₹18 lakh	Registered dealer has the GST liability or the recipient of goods in case of the Reverse Charge Mechanism
In case the GTA transports goods of an unregistered supplier	₹4 lakh	GTA has a GST liability
Total Turnover	₹22 lakh	GTA will have to register under GST as the total turnover exceeds ₹20 lakh and services are provided to an unregistered supplier

Scenario 3:

Here is the third scenario illustrating the GST registration requirements for GTA:

Service	Turnover	GST Payer
In case GTA transports goods of a registered supplier or any of the seven entities	₹26 lakh	Tax liability is with the registered supplier or recipient of services (under RCM)
Transportation of goods of an unregistered supplier	₹0 lakh	Not Applicable
Total Turnover	₹26 lakh	As per Notification Number 05/2017, GTA will not have to register under GST despite turnover exceeding ₹20 lakh.

Who Pays GST When Hiring a GTA?

The recipient of service is liable to pay GST on Goods Transport Agency services, under the Reverse Charge Mechanism, and not the service providers. For instance, businesses hiring GTA including corporations, factories, and other entities, bear the tax liability.

Notably, if the GTA chooses to pay GST at 12% with ITC (Input Tax Credit), then the GST liability is with GTA.

Which Businesses Are Required to Pay GST Under Reverse Charge for GTA Services?

If GTA does not pay Central Tax at a 6% rate, the recipients of services needs to bear the tax liability. The recipients, however, need to be from a taxable territory and the categories mentioned below:

● Factories registered under the Factories Act, 1948

● Societies registered under the Societies Registration Act, 1860 or any other applicable law

● A registered person under CGST, SGST, UTGST or IGST (Central/State/Union Territory/Integrated Goods and Services Tax)

● A Co-operative society

● A corporate body established by or under any law

● A partnership firm (registered or unregistered)

● Casual taxable persons

Who Needs to Pay GST Under Reverse Charge?

Based on the person paying freight, here is the entity liable to pay GST under reverse charge for the road transportation services or road transport services:

1. If the sender pays the freight payment

In case the sender (consignor) falls under special categories, they need to pay GST on a reverse charge basis. Notably, the consignor or sender is the recipient of transportation services.

2. If the receiver pays the freight payment

When the consignee or receiver is considered the recipient of services and falls under special categories, they have the GST liability.

Different Scenarios to Determine Who Pays GST for GTA Services

Here are different instances determining the GST liability for GTA services:

Supplier/Consignor	Receiver of Goods/Consignee	Person Paying Freight	A Person with GST Liability
A registered or unregistered company	An unregistered or registered partnership firm	Company	Company
An unregistered or registered partnership firm	Registered Dealer A	Dealer A	Dealer A
A registered or unregistered partnership firm	Registered Dealer B	Firm	Firm
An unregistered or registered Co-operative Society Ltd	Registered Dealer A	Dealer A	Dealer A
A registered or unregistered Co-operative Society Ltd	Registered Dealer A	Co-operative Society Ltd	Co-operative Society Ltd
Registered or unregistered Company A Ltd.	Unregistered or registered Company C Ltd.	C Ltd	C Ltd
URD A	Registered Dealer B	URD A	Dealer B
URD A	Registered Dealer B	Dealer B	Dealer B
URD A	URD Z	URD Z	Exempted

Reverse Charge Implications for an Unregistered GTA

Earlier, if registered businesses received goods or services from unregistered suppliers, with a cost not more than ₹5,000 per day, they were exempted from GST liability. With revisions in the regulations, the reverse charge mechanism applies to specific unregistered purchases, as declared by the government.

Input Tax Credit (ITC) for GTA Services 

ITC claims for GTA vary based on the chosen GST rate as follows:

1. ITC When the GTA Pays GST

GTA has the option to choose a 5% or 12% GST rate based on the tax regime they opt for at the beginning of a financial year. If they choose a 12% GST, they can claim ITC on inputs and services purchased. However, if GTA opts for a 5% GST rate, they cannot claim ITC.

2. ITC When the Service Receiver Pays GST Under Reverse Charge

If the service receiver operates under a reverse charge mechanism, he/she can claim ITC instead of GTA. This helps the service recipient reduce their GST liability.

How to Create an Invoice for GTA Services?

You need to include the following details to create a GST-compliant tax invoice for GTA:

• Name, GSTIN and address of the GTA
• Unique invoice number and date of invoice
• Consignor and consignee details
• Description of transported goods
• Description of service
• GST rate and amount
• Total amount including the GST payable

Notably, invoice matching with transaction details is crucial for a transportation business through GTA.

How Should a GTA Pay Their Tax?

A registered GTA can pay GST online using the GST portal with payment methods like credit/debit cards, UPI or net banking. For offline payment, GTA has to generate a GST challan online and pay at one of the authorised banks.

GST Returns that a GTA Must File

The GST returns that a GTA needs to file are as follows:

GST Return	Purpose of Filing
GSTR-1	Outward supplies details filed quarterly or monthly
GSTR-3B	Summarises all transactions filed monthly
GSTR-9	Annual return summarising yearly transactions

Determining the Place of Supply for GTA Services

Here is how to determine the place of supply for GTA based on a registered or unregistered recipient of services:

1. Registered Recipients: For a registered recipient, the place of supply is the registered business address, determining inter-state or intra-state transactions (IGST/CGST and SGST).

2. Unregistered Recipients: For an unregistered recipient, the place of supply is the location from where GTA collects goods; this determines IGST, CGST and SGST.

Examples for Determining the Place of Supply

Here are some scenarios depicting various transactions to determine the place of supply:

Scenario 1:

A registered dealer Mr X in Maharashtra hires a GTA for goods transportation from Mumbai to Pune.

Place of Supply: Maharashtra

Applicable GST: CGST and SGST as it is an intra-state supply

Scenario 2:

A registered dealer Mr Y in Karnataka hires GTA to transport goods to Chennai from Bangalore.

Place of Supply: Karnataka

Applicable GST: IGST as it is an inter-state goods transport

Scenario 3:

An unregistered dealer Mr Z in Delhi hires GTA to transport goods to Haryana from Delhi

Place of Supply: Delhi (where GTA collects the concerned goods)

GST Applicable: IGST as it is an inter-state transport of goods

Importance of ‘In Relation To' in the Definition of GTA 

The term 'in relation to' refers to goods connected to GTA and actual transportation by road associated with the actual movement of goods. This includes GTA activities like unloading, loading, packing, unpacking and others directly associated with transportation.

Notably, independent services that are not directly related to transportation are not categorised under GTA. Services directly linked to goods transportation and GTA have consistent treatment under the GST laws.

Conclusion

Goods Transport Agency under GST has to register themselves as per GST laws if their annual turnover exceeds ₹20 lakh (₹10 lakh for special category states). Further, the registration requirements vary based on whether GTA transports goods of registered or unregistered dealers.

Notably, GTA has a choice to opt for a 5% or 12% GST regime at the beginning of a financial year. If they opt for the latter, they can claim ITC to reduce their tax burden and liability. However, under the reverse charge mechanism, the service recipients are eligible to claim ITC on input services.

Ensure you adhere to the applicable GST laws for transparency and tax compliance. In the transportation and logistics sector, compliance requirements are as strict as in other sectors. Associations of persons well aware of the laws can help you reduce the compliance burden.

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