An overview of the provision related to GST on Road Transport Services

 

If your business relies on transporting goods by road, here’s something critical you should know – not all such services attract GST.

Whether you’re GST professional, MSME owner, or accountant, understanding the nuances of GST on transportation can save your business from unwanted notices and optimize compliance.

Here are 5 key points which everyone must be aware of:

1.  Basic Road Transport – GST Exempt
Transport of goods by road is exempt from GST unless done by a Goods Transport Agency (GTA) or a courier agency.

2.  GTA Services to Unregistered Persons – Exempt
If a GTA provides services to an unregistered person, it continues to be GST exempt.

3.  Hiring Vehicles for GTA? No GST!
When a GTA hires transport vehicles, GST is not applicable – if it’s for transporting goods or carrying more than 12 passengers for a state transport undertaking.

4.  What Makes Someone a GTA?
A business entity providing service of Transport of Goods by Road becomes a GTA only if it issues a consignment note. No consignment note? No GTA status – and potentially no GST.

5.  Reverse Charge for Registered Recipients
If your business is registered under GST, and you’re availing GTA services (where the GTA hasn’t opted for forward charge @12%), you must pay GST under reverse charge.

These distinctions can change how you structure contracts and manage GST liability.