Notification no. 13/2017-Central tax (Rate) read with notification no. 17/2017-Central tax (Rate) specifies 11 services in respect of which tax is payable by the recipient of services. The notification no. 10/2017-Integrated tax (rate) read with notification no. 14/2017-Integrated tax (rate) specifies 13 services in respect of which tax is payable by the recipient of service.

A GTA service is specified in both the notifications viz. Central tax and integrated tax.

GTA SERVICES:

  • Supplier of service:

Goods Transport Agency (GTA)

  • Recipient of service:
    1. Any factory registered under or governed by the factories Act, 1948; or
    2. Any society registered under the societies Registration Act,1860 or under any other law for the time being in force in any part of India; or
    3. Any co-operative society established by or under any law; or
    4. Any person registered under Central Goods and Service Tax Act or the Integrated Goods and Service Tax Act or the State Goods and Service Tax Act or the Union Territory Goods and Service Tax Act; or
    5. Any body corporate established, by or under any law; or
    6. Any partnership firm whether registered or not under any law including association of persons; or
    7. Any casual taxable person located in the taxable territory.
  • Meaning of Goods Transport Agency and Goods Carriage:
    1. Goods transport agency is defined in para 2(ze) of notification 12/2017-Central Tax (Rate) as follows:-

‘Goods transport agency’ means any person1 who provides service in relation to2 transport of goods by road and issue consignment note3, by whatever name called.

  1. The person is defined in Sec 2(84) of the Central Goods and Service Tax (CGST) Act, 2017
  2. The word ‘in relation to’ have been held to be equivalent to “concerning with” or “pertaining to”, which might both have a direct significance as well as indirect significance.(It can be said that any service which has a direct or indirect connection with a specified service has to be treated as ‘in relation to’ that specified service – Daypack Systems (P.) Ltd. v. Union of India 1988(36) ELT 201 (SC)). However, GST council on their 21st meeting held in Hyderabad on 9-9-2017 had clarify below:

 

The use of the phrase ‘in relation to’ has extended the scope of definition of GTA. It includes not only the actual transportation of goods, but any intermediate/ancillary service provided in relation to such transportation, like loading/unloading, packing/ unpacking, transhipment, temporary warehousing, etc. If these services are not provided as independent activities but are the means for successful provision of GTA service, then they are also covered under GTA.

Thus, from above GTA service not only includes transportation of goods but it also includes various other services like loading/unloading, packing/ unpacking, transhipment, temporary warehousing, etc. for provision of GTA service. Thus, if such services are provided independent to transportation of goods then the same will not be covered under the services of Goods Transport Agency.

  1. The Act provides that both the conditions, namely, transport of goods by road and issue of consignment note must be satisfied. When the person deposit the goods, the transporter issue the lorry receipt or consignment note to the person depositing the goods. The original copy of the lorry receipt is sent by the person depositing the goods to the consignee to enable him to collect the goods from the transporter. The tribunal in case of Bharati Soap Works v. CCE (2008) 13 STT 196 (Bang.-CESTAT) observed that the transporter are bound to issue the consignment note or bills or any other serially numbered bills.
  1. The clause 2(zd) of notification 12/2017- Central Tax (Rate) defines ‘goods carriage’ as meaning assigned to it in clause (14) of section 2 of Motor vehicle Act. It means vehicle shall have permit to transport goods.
  • Person liable to pay tax (Reverse charge):

As per Notification no. 13/2017-Central tax, dated 28-06-2017, GST in respect of services of transportation of goods by road supplied by goods transport agency is payable by recipient of service where the consignee or consignor is any of the following :

  1. Any factory registered under or governed by the factories Act, 1948; or
  2. Any society registered under the societies Registration Act,1860 or under any other law for the time being in force in any part of India; or
  3. Any co-operative society established by or under any law; or
  4. Any person registered under Central Goods and Service Tax Act or the Integrated Goods and Service Tax Act or the State Goods and Service Tax Act or the Union Territory Goods and Service Tax Act; or
  5. Any body corporate established, by or under any law; or
  6. Any partnership firm whether registered or not under any law including association of persons;(as per explanation (e) added to the notification no. 13/2017-CT (rate) by notification no. 22/2017-CT (Rate) dated 22-8-2017, partnership firm will include Limited Liability Partnership (LLP) and registered under the provision of Limited Liability Partnership Act,2008.)
  7. Any casual taxable person; Located in the taxable territory.

If the recipient of service is person other than mentioned above, GST will be payable by transporter.

Explanation (a) of notification no. 13/2017-Central Tax dated 28-06-2017 provides that GST is payable by the person who pays or is liable to pay freight by himself or through agent for transportation of goods by road on goods carriage located in taxable territory shall be treated as person who receives service for the purpose of this notification. Thus, the liability to pay GST is upon the person who as per the contract is liable to pay the amount to the transporter. However, when such person is located in non-taxable territory, the provider of such service shall be liable to pay GST. If the payment is made by person other than mentioned above, the GST is payable by provider of service.

  • Payment of Tax under GTA service:
    1. If service receiver is as specified category recipient: Recipient to pay GST on RCM at 5%, recipient allowed to take credit.
    2. If service receiver is other than specified category recipient: GTA has to discharge GST at 5% without availment of ITC; as no reverse charge would be applicable, however to avail the ITC GTA has to pay GST at 12% under forward charge.
  • Support service:

Notification no. 11/2017-CT (Rate) dated 28-06-2017 provides that rate of 5%(2.5% CGST and 2.5% for SGST or UTGST) for support service for GTA in relation to transportation of goods, provided credit of input tax charged on goods and services has not been availed. Notification no. 20/2017- CT (Rate) dated 22-8-2017 has also amended sr. no. 11 of notification no. 11/2017-CT (Rate) by providing option for availment of credit and payment of tax at 12%. Thus for support services in relation to GTA, tax payable is 5% without input tax credit or 12% with input tax credit.

-CA Manisha A Ahra

15+

LEAVE A REPLY

Please enter your comment!
Please enter your name here