Under GST, a GTA implies any organization or person transporting goods on the road. With effect from July 2022, two major amendments became effective for GTAs such as exemption withdrawals for all services rendered by GTAs and GST taxability of GTA-related services.
Till 17th July 2022, GTA services for goods transportation were exempt from GST. The condition being charges for the transported goods were below INR 1500 or the transportation charges for a solitary consignee were below INR 750.
However, since 18th July 2022, both exemptions have been withdrawn. In other words, following the withdrawal, all services rendered by GTAs are liable to be taxed as either reverse or forward charges under the GST.
The applicable GST rate is 5% and comprises 2.5% SGST and 2.5% CGST. provided that the GTA does not avail input tax credits on the services and goods it provides. Additionally, the mechanism for the reverse charge is applicable if services have been provided to seven specific service recipients. Those may be any factory registered according to the provisions of the Factories Act, 1948. Also, any society which falls within the purview of the Societies Registration Act, 1860, and all co-operative societies fall under Zthe purview of GST.
From July 2022 onward, all GTAs can pay GST by forward charge. Alternatively, they can also choose not to pay by forward charge. For those opting to pay under forward charge, a 5% GST is payable. However, any input tax credits are unavailable to such GTAs. The GTA can alternately pay 12% GST and avail of input tax credits.
To exercise the first option, a declaration has to be filed under Annexure V on or prior to the 15th of March of the previous financial year. In order to exercise this option in the present financial year, for example, for 2022-2023, a declaration has to be filed by the GTA under Annexure V before or on 16th August 2022.
In a nutshell, the GST that a GTA charged up to July 17th, 2022, was 13% or 5% on the basis of a forward charge. The input tax credit was available only when 12% GST was charged. On the basis of the reverse charge, a 5% GST was payable by the specified recipient of the service and no input tax credit was available to the GTA.
It may be noted, however, that in all cases mentioned above, the service recipient will be entitled to the input tax credit. Still, all other assorted conditions for the input tax credit are satisfied.
To know more about the current situation of goods transport agency under GST, scour the FiMoney financial website. The site publishes all the latest amendments and rules on the concept and will keep you informed about the latest happenings in this sphere.
An 8% GST is payable on road vehicle rental services including trucks, freight aircraft rental services, and water including freight vessel rental services.
On any travelling business, the GST can be claimed as an input tax credit (ITC) on your air tickets. Moreover, airlines can also claim the ITC on any input services as far as passengers of economy class are concerned. In travel by business class, ITC for airlines is claimable for spare parts and food, among other items, except fuel.
