GST Registration for Goods Transport Agency (GTA) Services – All about GST on GTA services including ITC, RCM etc

 

1.0 Introduction

Goods Transport Agency which is commonly known as GTA services is always been a matter of dispute and confusion under earlier laws. Under GST as well, GTA service providers are still guessing on how GST shall impact them and whether they need to register under GST or not.

Hence, we have written this article to clear all doubts, regarding the GST registration for GTA service providers. Let us proceed on to discuss the impact on GTA.

 

2.0 GTA under complete Reverse Charge Mechanism (RCM)

The government of India via notification no.13/2017 has been kept the GTA services under complete reverse charge. Reverse charge means that GTA is not liable to pay any tax rather the company which is the recipient of the services shall pay the GST in cash to the government.

In simple words, GTA service providers in respect of transportation of goods by road shall not be liable to pay GST.

 

3.0 Exemption from GST registration for GTA services

If a person is providing only GTA services which are notified under reverse charge (as stated above), then GST registration is not required for them. Further, it is not the option but a regulation. Hence, the tax on GTA shall always be paid by the recipient and not by the GTA service provider.

In simple words, even if the GTA has a turnover of 100 crore, the GST registration shall not be required for them because they are under reverse charge mechanism.

Please read point 6 below.

 

4.0 GST tax rate on GTA service provider

The GST tax rate for GTA services is 5% and shall be paid under reverse charge.

 

5.0 Input Tax Credit (ITC) of GST paid on GTA services under reverse charge

The ITC on GST paid on GTA services under reverse charge shall be available to the person who is liable to pay the GST. This is because the GTA service is treated as input service and hence any tax paid on input service is available for ITC.

 

6.0 Case where GTA service is provided to unregistered dealer

If in case the GTA services are provided to an unregistered dealer then GTA service provider shall be liable to pay GST and register himself under GST. Further, the GST tax rate shall be 5% in case he is not availing any ITC.

However, if he chooses to avail ITC, the tax rate shall be 18%.

 

7.0 Conclusion

In case you have any query, kindly write to us at info@hubco.in.

 

Related Links:

• GST Registration
• GST Return Filings
• GST Software