Changes in GST on goods transport services (GTA) with effect from 18.07.2022

[Chandrasekhar Kutty]

Vide Notification No.3/2022 Central Tax (Rate) dated 13^th July 2022 has amended Notification No. 11/2017 – Central Tax (Rate) dated 28^th June 2017. There is a change in the chargeability of GST on the services of GTA from 18.07.2022. The new provisions are as below:

The services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use) supplied by  a GTA is covered under this notification.

The GTA now has two options to choose:

1. Reverse Charge
2. Forward Charge

Reverse charge

GTA in this case does not exercise any option and chooses his services to be taxed under reverse charge. The service recipient pays GST @ 5% under reverse charge.   

Forward charge

GTA has been given two options under this option as follows:

1. Forward charge @ 5%

No input tax credit will be available if services supplied at this rate.

2. Forward charge @12%

Input tax credit available for supplying at this rate.

The GTA will have to exercise his option to choose forward charge @5% or forward charge @12% at the beginning of the financial year. The time limit given is 15^th March of the preceding financial year. Meaning thereby, if the GTA has to choose the option for the financial year 2023-23, he has to file the declaration before 15^th March 2023, for the financial year 2022-23, the GTA has been given option to exercise his option by filing the declaration before 16^th August 2022. If the GTA issues tax invoice @5% or 12% for the supplies made after 18^th July 2022, then compulsorily he has to file the declaration before 16^th August 2022, since he has decided to choose the option of forward charge by issuing tax invoice.

“Annexure V

FORM

Form for exercising the option by a Goods Transport Agency (GTA) for payment of GST on the GTA services supplied by him under forward charge before the commencement of any financial year to be submitted before the jurisdictional GST Authority.

Reference No.-

Date: -

1. I/We______________ (name of Person), authorised representative of M/s……………………. have taken registration/have applied for registration and do hereby undertake to pay GST on the GTA services in relation to transportation of goods supplied by us during the financial year……………under forward charge in accordance with section 9(1) of the CGST Act, 2017 and to comply with all the provisions of the CGST Act, 2017 as they apply to a person liable for paying the tax in relation to supply of any goods or services or both;
2. I understand that this option once exercised shall not be allowed to be changed within a period of one year from the date of exercising the option and will remain valid till the end of the financial year for which it is exercised.

Legal Name: -

GSTIN: -

PAN No.

Signature of Authorised representative:

Name of Authorised Signatory:

Full Address of GTA:

Exemptions removed for Goods transport agency

Notification 12/2017 Central Tax (Rate) has been amended to remove the below exemptions available to GTA’s

1. Goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees;
2. Goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty.

Above two exemptions have been removed with effect from 18^th July 2022 vide Notification no. 4/2022 Central Tax (R) dated 13^th July 2022. This means, any value of supplies by GTA now will be liable for taxation either under reverse charge or forward charge depending on the option exercised by the GTA.

Discussions to this article

[Bayyareddy DK]

Dear Sir,

Incase of Goods Transport Agency, In the case of services to a registered person, the recipient will pay GST @ 5% under RCM.

In the case of services to a unregistered person withinstate who will pay GST?.

Also In the case of services to a unregistered person Interstate who will pay GST?.

Please advice and if exempted, please share notification number.

[Chandrasekhar Kutty]

Sl NO. 21A of NN 12/2017 dated 28.06.2017 (Inserted this clause vide NN 32/2017) dated 13.10.2017 exempts Services provided by a goods transport agency to an unregistered person, including an unregistered casual taxable person with certain exemptions.

[SOWMYA CA]

Sir,

Can we now say, that if GTA were to transport used household articles, of unregistered persons, it will be exempt and if the household articles of registered persons were to be transported, then it would be taxable at 5%/12% forward charge or at 5% RCM?

[Chandrasekhar Kutty]

Services provided to unregistered person other than factory, society, body corporate, partnership firm etc is exempted. If any service provided by GTA to registered person other than if not exempted under NN 12/2017 like transportation of milk, salt, food grains, newspapers & magazines etc is taxable. So household goods of a registered person though it is for the personal use of the recipient, will be taxable for the GTA.

[Srikanth Kolla]

Whether the persons who are regularly paying under forward charge due to 12% or legal status like corporates also needs to give this declaration?

[SravanKumar Pilla]

Sir,

Is GST applicable if the household goods are transported outside India? What if packers and movers move the goods outside India?

[Chandrasekhar Kutty]

Since it is not in the course of furtherance of your business GST will not be applicable to you.