Latest Query & Reply

Company U requires transportation service to obtain or bring goods from M/s L so it gives the contract to Mr. G (Individual) to transport the goods from M/s L to Company U. Mr. G hires different transport service providers say A, B, C etc to provide the said service for different orders depending upon the availability. Mr. G does not have their own vehicles/ Trucks. The payment is made by Company U to Mr. G after deducting the TDS @ 1%.The total receipts from Company U to Mr. G in the year 2017-18 is 27 Lakh (Aprox).

Please clarify on the following issue

1) Will Mr. G be treated as GTA??

2) Is Mr. G required to obtain GST registration?? If yes When??

3) Will Mr. G require to pay GST on RCM of the Transport service provider A, B, C etc?

4) What documents are required to be obtained from Transport service provider A, B, C etc?

5) What will be the situation if the Transporter A, B, C is unregistered from GST? 

6) What will be the situation if the Transporter A, B, C is registered in GST?  

Please suggest a way out from which Mr. G can be best benefited.

Reply

1) As per Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017, goods transport agency” or GTA means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. Therefore Mr. G will be treated as GTA if it issues consignment note to the service recipient.

2) GTA does not have to register under GST if he is exclusively transporting goods where the total tax is required to be paid by the recipient under reverse charge basis even if turnover exceeds Rs. 20 lakh. Thus, if Mr. G is engaged exclusively transporting goods where RCM is applicable, registration under GST is not required.

3) Services by way of giving on hire a means of transportation of goods to a goods transport agency is exempted under GST. Therefore if you are taking transport vehicles on rent from another GTA then it is not taxable under GST and is covered under exemption list. As the said service is exempt under GST, whether A, B, C are registered is not relevant.