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Feb 6, 2024

All About Goods Transport Agency (GTA) Under GST

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Nishtha Arora

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Goods Transport Agency (GTA)in GST is a term used to describe businesses that provide transportation services to transport goods by road. In the context of GST (Goods and Services Tax), GTA has a specific definition and is subject to specific rules and regulations.

Registration of GTA

Every Goods Transport Agency (GTA) must register for GST under the Goods and Services Tax (GST) regime. The following procedures are involved in the GST registration process for a GTA:

Step 1: The first step in the registration process is to visit the GST portal (www.gst.gov.in).

Step 2: The next step is to fill in the registration application form (Form GST REG-01) with the required details, including the legal name of the business, its address, email ID, and mobile number.

Step 3: The applicant needs to provide certain documents, such as the PAN card, Aadhaar card, bank account details, and proof of address. Proof of tenancy or ownership of the business premises must also be provided by the applicant.

Step 4: Once the application form and documents are filled and uploaded, the applicant needs to submit the application form electronically.

Step 5: The GST department will verify the application and the documents provided by the applicant.

Step 6: Upon successful verification, the GST department will issue a registration certificate (Form GST REG-06) to the GTA.

To register a GTA under GST, the following documents are needed:
  1. PAN card of the business.
  2. Aadhaar card of the authorized signatory.
  3. Proof of address, such as electricity bill, telephone bill, or property tax receipt.
  4. Bank account details, including the name of the bank, branch address, and account number.
  5. Proof of ownership or tenancy of the business premises, such as a rent agreement or property documents.
  6. Photographs of the authorized signatory.
  7. Authorisation letter or board resolution for the authorized signatory.

GST Rates for GTA

Under the Goods and Services Tax (GST) regime, the GST rates applicable to Goods Transport Agency (GTA) services depend on the nature of the goods being transported and the distance traveled:

  1. The GTA services have a 12% GST rate for the transportation of goods other than petroleum products.
  2. The GST rate for GTA services for the transportation of petroleum products is 5%.

GTA services are not subject to GST when goods are transported by rail or sea.

The GTA must pay GST for its services but can't make customers pay it. However, the GTA can choose to pay GST upfront, collecting it from customers and later getting a credit on expenses. To do this, a declaration must be filed with the GST department before the financial year begins.

Accounting and Record-keeping

A Goods Transport Agency (GTA) must keep accurate accounts and records for its transactions under GST. The specific accounting and record-keeping requirements for a GTA under GST include:

  1. Issue a tax invoice for each service, including details like GSTIN, customer's name and address, service description, value, GST rate, amount, and authorized person's signature.

  2. Provide a consignment note for each goods consignment, featuring serial number, consignor and consignee details, goods carriage registration number, goods specifics, and origin and destination locations.

  3. Maintain a register of issued and received tax invoices and consignment notes, recording date, number, value, and GST amount for each transaction.

  4. Keep a register of expenses, detailing input tax credit claims on items like fuel, tolls, maintenance, and other charges.

  5. Record all payments received and made, specifying mode, date, amount, and GST amount for each transaction.

  6. Maintain a register of goods in transit, documenting consignor, consignee, goods carriage, and destination details.

  7. Keep a register of filed returns and taxes paid, indicating date, period, amount, and transaction mode.

The GTA should preserve all the accounts and records for at least six years from the end of the financial year to which they pertain.

Also Read: What Role GST Software Plays For Your Business?

E-way Bill Generation

E-way bill generation is a mandatory electronic process for goods valued over Rs. 50,000 during their movement. This document, featuring details like goods information, consignor, consignee, transporter, and vehicle, can be created online at the e-way bill portal, via SMS, or a mobile app.

In the GST system, the responsibility for generating the e-way bill rests with the entity initiating the goods movement. In the case of GTA services, the consignor, consignee, or the GTA itself can generate the e-way bill based on contractual terms.

For a GTA, the e-way bill process involves:

1. Registration: Sign up on the e-way bill portal using the GSTIN and the GTA's mobile number.

2. Form Submission: Fill out the e-way bill form (Form EWB-01) with necessary details like GSTINs, invoice/challan number, goods value, HSN code, movement details, and transporter ID.

3. Generation: After form submission, the e-way bill with a unique number (EBN) is generated. It can be printed or downloaded.

4. Updates: The GTA can modify the e-way bill for changes in vehicle number or transporter ID during goods movement. Also, the e-way bill's validity can be extended due to delivery delays caused by unforeseen circumstances.

The e-way bill is valid based on distance, allowing one day for every 100 km or part thereof. It must accompany goods and the consignment note during transportation by the GTA.

GST Returns for GTA

A Goods Transport Agency (GTA) is obligated to file GST returns monthly or quarterly based on turnover and registration type. The relevant GST returns for a GTA include:

Form GSTR-1: Filed monthly or quarterly, this return reports details of tax invoices and consignment notes for outward supply of services. The filing deadline is the 11th of the next month or the end of the next quarter, depending on the filing frequency.

Form GSTR-3B: This summary return for tax payment includes the total value and GST amount of outward and inward services, input tax credit claimed, and net tax liability. The due date is the 20th of the next month, along with the tax payment.

Form GSTR-4: For composition scheme participants, this return, filed by the 18th of the month following the quarter, involves paying a flat 6% GST on turnover without claiming the input tax credit.

Form GSTR-6: This return for input service distribution requires the GTA to distribute input tax credit to its branches or units. The filing deadline is the 13th of next month.

Form GSTR-7: For tax deducted at source, this return reports details of tax deducted from payments to service suppliers. It must be filed by the 10th of the next month, along with the tax payment.

Form GSTR-9: An annual return consolidating details of outward and inward service supply, input tax credit, taxes paid and refunded, and amendments during the financial year. It should be filed by December 31 of the next financial year.

Also Read: Make GST Reconciliation Easy With Automation

Liabilities and Penalties

A Goods Transport Agency (GTA) is responsible for paying GST on services as per the discussed rates and provisions. Failure to pay GST on time or in full, or committing other offenses under GST law, can result in the following liabilities and penalties for the GTA:

  • Interest: The GTA faces an 18% per annum interest rate on unpaid or delayed GST amounts, calculated from the due date until the actual payment date.
  • Penalty: A penalty of 10% of the unpaid or short-paid GST amount, or Rs. 10,000 (whichever is higher), is imposed for any default or fraud in GST payment.
  • Prosecution: In cases where the unpaid or short-paid GST amount exceeds Rs. 5 crore, and deliberate default or fraud is proven, the GTA may face prosecution and imprisonment for up to five years.

To prevent these liabilities and penalties, the GTA should ensure timely and accurate payment and filing of GST while complying with all provisions and rules of the GST law.

Input Tax Credits for Recipients

Under GST, recipients of Goods Transport Agency (GTA) services can claim Input Tax Credit (ITC) based on:

  • Nature of Recipient: ITC is available for registered persons liable to pay GST on inward supplies; unregistered persons are not eligible.
  • Nature of Goods: ITC eligibility depends on whether the goods transported are taxable or exempt under GST.
  • Nature of Supply: ITC availability varies for intra-state and inter-state supplies based on the location of the supplier and the place of supply.

Recipient ITC eligibility hinges on these factors, impacting their ability to offset GST paid by the GTA.

Nature of RecipientNature of GoodsNature of SupplyInput Tax Credit
Registered PersonTaxable GoodsIntra-stateYes
Registered PersonTaxable GoodsInter-stateYes
Registered PersonExempt GoodsInter-stateNo
Registered PersonExempt GoodsInter-stateNo
Unregistered PersonTaxable GoodsInter-stateNo
Unregistered PersonTaxable GoodsInter-stateNo
Unregistered PersonExempt GoodsInter-stateNo
Unregistered PersonExempt GoodsInter-stateNo

To claim input tax credit for GTA services, the recipient must:

  1. Have a valid GSTIN and be registered under GST.
  2. Possess a tax invoice or consignment note from the GTA, detailing GST amounts and GSTINs of both parties.
  3. Receive goods or services from the GTA with evidence of movement, like an e-way bill or delivery challan.
  4. Pay the GST amount to the GTA or government, with proof of payment such as a bank statement or challan.
  5. File GST returns and claim an input tax credit in the prescribed manner and time frame.

In summary, grasping the GST implications for the Goods Transport Agency (GTA) is crucial for enterprises offering goods transportation services. Ensuring adherence to regulations and meticulous record-keeping is vital to prevent incurring penalties and interest charges. Given the potential changes in GST rules and regulations about GTA, businesses should stay informed about the latest updates to ensure ongoing compliance.

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