Goods Transport Agency (GTA) Services by Road are an integral part of the Indian economy. With the advent of GST (Goods and Services Tax), businesses involved in the transportation of goods through GTA are required to comply with the new tax regime. In this article, we will discuss in detail the impact of GST on GTA services by road
Firstly, it is important to understand what a Goods Transport Agency (GTA) is. A GTA is a person who provides services of transportation of goods by road and issues a consignment note, commonly known as a lorry receipt. The GTA can be an individual, partnership firm, company, HUF, etc.GST on GTA Services by RoadUnder GST, the transportation of goods through a GTA is treated as a supply of service. As per the GST Act, the service provided by a GTA in relation to transportation of goods by road is a ‘taxable service’. The person who pays or is liable to pay freight charges for the transportation of goods is required to pay GST on the GTA services.The GST rate on GTA services by road is 5% without the availability of input tax credit. However, if the GTA opts to pay tax at the rate of 12% on their GTA services by road, then the GTA can avail input tax credit on goods and services used in providing the GTA services.
A Goods Transport Agency (GTA) is required to obtain GST registration if its aggregate turnover exceeds Rs. 20 lakhs in a financial year. It is important to note that the turnover of a GTA includes the total turnover earned by providing GTA services and any other taxable supplies.
In addition to obtaining GST registration, a GTA is also required to comply with various other provisions of the GST Act, such as issuing tax invoices, maintaining proper records, filing GST returns, etc.
The introduction of GST has brought about a significant change in the taxation of GTA services. Earlier, GTA services were subject to service tax at a rate of 15% and there was no input tax credit available. However, under GST, the tax rate on GTA services by road is lower at 5%.
Moreover, the availability of input tax credit on goods and services used in providing the GTA services has made it easier for GTAs to claim tax credit and reduce their tax liability. This has resulted in a reduction in the overall cost of transportation and has made the transportation of goods through GTAs more affordable for businesses.
In conclusion, the introduction of GST has streamlined the taxation of GTA services by road. The lower tax rate and availability of input tax credit have made it easier for GTAs to comply with the new tax regime and has also reduced the cost of transportation of goods. However, it is important for businesses involved in the transportation of goods to understand the provisions of the GST Act and comply with the same to avoid any penalties or legal issues.
TNGST Act, 2017- Identification and prevention of bill traders
Impact of GST on E-Commerce Marketplace Sellers
Valuation of Stock Transfers under GST