Goods Transport Agencies (GTAs) are vital to the logistics industry, offering services for transporting various goods. Under India's GST framework, GTAs must adhere to specific compliance standards to ensure precise tax reporting and avoid penalties. This article delves into the critical aspects of GST for GTAs, including registration mandates, the Reverse Charge Mechanism (RCM), HSN code requirements, and recent regulatory changes.

Key Updates In September 2025, the definition of a Goods Transport Agency (GTA) was revised by Notification No. 16/2025-Central Tax (Rate). This update specifically excludes e-commerce operators who provide or facilitate local delivery services from the GTA classification. As of January 2025, HSN code reporting became mandatory for GTA services, particularly for both domestic and export transportation. Businesses exceeding a turnover of ₹5 crore are required to report 8-digit HSN codes.

What is a GTA?

The updated definition, introduced by Notification No. 16/2025-Central Tax (Rate) dated July 16, 2025, states that a GTA is:

"Any individual or entity that offers services related to the transport of goods by road and issues a consignment note, regardless of its name. This definition, however, explicitly excludes:

• An electronic commerce operator directly providing local delivery services.
• An electronic commerce operator facilitating local delivery services through its platform."

Why Do GTAs Need to Pay GST?

GST law specifically exempts certain modes of goods transportation:

• Road transport, with the exception of services provided by a goods transportation agency or a courier agency.
• Inland waterways transport.

Consequently, Goods Transport Agencies (GTAs) are subject to GST.

What Services Are Covered Under a GTA?

GTA services encompass more than just the physical movement of goods. They also include intermediate or ancillary services provided in conjunction with transportation, such as:

• Loading and unloading
• Packing and unpacking
• Trans-shipment
• Temporary warehousing

If these services are bundled with transportation and not offered as separate, independent activities, they fall under the scope of GTA services.

What is the GST Rate for GTA Services?

Different GST rates apply to GTA services based on the nature of goods transported and other conditions:

As per Notification No. 20/2017-Central Tax (Rate) dated August 22, 2017.

On December 31, 2018, the Government canceled Notification No. 32/2017-Central Tax (Rate) dated October 13, 2017, making purchases from unregistered dealers taxable. However, the specific list of registered persons or transactions is still awaiting notification.

The declaration must be submitted in Annexure - V by March 15 of the year preceding the financial year. The GTA must include this declaration on all invoices issued.

Is a GTA Required to Register Under GST?

There was initial uncertainty regarding GST registration for GTAs. However, according to Notification No. 5/2017-Central Tax dated June 19, 2017, individuals making only taxable supplies of goods or services subject to the Reverse Charge Mechanism (RCM) are exempt from GST registration.

Therefore, a GTA is not obligated to register under GST if its sole activity is transporting goods where the entire tax liability rests with the recipient under RCM, even if its turnover surpasses the usual registration threshold.

Registration Scenarios for Goods Transport Agencies

• The threshold for GST registration for suppliers of goods has been increased to ₹40 lakh.

Who is Responsible for Paying GST When Hiring a GTA?

When a GTA provides services to specific types of businesses, the recipient of those services is required to pay GST under the reverse charge mechanism.

Which Businesses Are Liable to Pay GST Under RCM for GTA Services?

The following types of businesses (service recipients) are obligated to pay GST under the reverse charge mechanism:

• A factory registered under the Factories Act, 1948;
• A society registered under the Societies Registration Act, 1860, or any other relevant law;
• A co-operative society established under any law;
• A GST-registered person;
• A body corporate established by or under any law;
• A partnership firm, whether registered or not (including an Association of Persons - AOP);
• A casual taxable person.

Who Pays GST Under the Reverse Charge Mechanism?

As per Notification No. 13/2017-Central Tax dated June 28, 2017, the person who pays or is responsible for paying freight for the transportation of goods by road in a goods carriage, within the taxable territory, is considered the receiver of the service.

Payment by Sender

If the consignor (supplier of goods) pays the GTA, then the sender is deemed the recipient of the service. If the sender falls into one of the specified categories mentioned above, they will pay GST on a reverse charge basis.

Payment by Receiver

If the consignee (receiver of goods) is responsible for freight payment, then the receiver of the goods is treated as the recipient of transportation services. If the receiver belongs to any of the aforementioned categories, they will pay GST on a reverse charge basis.

Determining GST Liability for a GTA: Various Scenarios

Understanding who is liable to pay GST in GTA services can be complex. Here are different scenarios:

*GTA services provided to an unregistered person were exempted as per Notification No. 32/2017-Central Tax (Rate) dated October 13, 2017. However, this notification was canceled on December 31, 2018, meaning tax must be paid under RCM for unregistered purchases on a notified list of supplies, which is still pending notification.

Reverse Charge for an Unregistered GTA

According to Notification No. 32/2017-Central Tax (Rate) dated June 28, 2017, intra-state supplies of services or both, received by a registered person from an unregistered supplier, were exempt from GST if the value did not exceed ₹5,000 in a day. This notification has been canceled, and now RCM applies to unregistered purchases only for a specified list of supplies, which is yet to be announced.

Invoicing Requirements for GTAs

Any GST-compliant invoice issued by a GTA must include the following essential details:

• Names of the consignor and consignee
• Registration number of the goods carriage used for transportation
• Detailed description of the goods transported
• Gross weight of the consignment
• Origin and destination of the goods
• GSTIN of the person responsible for paying tax (consignor, consignee, or GTA)
• Name, address, and GSTIN (if applicable) of the GTA
• A sequentially generated, unique tax invoice number for the financial year
• Date of invoice issuance
• Description of the service provided
• Taxable value of the supply
• Applicable GST rate (CGST, SGST, IGST, UTGST, and cess clearly stated)
• Amount of tax (with a breakdown for CGST, SGST, IGST, UTGST, and cess)
• Indication of whether GST is payable under the reverse charge mechanism
• Signature of the supplier

What is a Consignment Note?

A consignment note is a crucial document issued by a goods transportation agency upon receiving goods for road transport in a goods carriage. If a transporter does not issue a consignment note, they do not fall under the definition of a goods transport agency. The issuance of a consignment note signifies that the lien on the goods has been transferred to the transporter, making them responsible for the goods until safe delivery to the consignee. A serially numbered consignment note includes:

• Name of the consignor
• Name of the consignee
• Registration number of the goods carriage
• Details of the goods
• Place of origin
• Place of destination
• The party liable to pay GST: consignor, consignee, or the GTA.

How to Determine the Place of Supply (PoS) for a GTA?

The place of supply for goods transportation services, including those via mail or courier, is determined as follows:

• For a registered person, the place of supply is the location of that person.
• For an unregistered person, the place of supply is the location where the goods are handed over for transportation.

Examples for Determining Place of Supply

• Scenario 1: Rajesh, a registered dealer in Bangalore, hires a GTA to transport goods to Mumbai. The place of supply will be Bangalore.
• Scenario 2: Anita, an unregistered dealer in Gujarat, hires a GTA to transport goods to Rajasthan. The place of supply will be Gujarat, where Anita hands over the goods to the transporter.
• Scenario 3: Vikas is registered in both Mumbai and Bangalore. He hires a transporter (based in Mumbai) to deliver goods from Bangalore to Delhi. CGST and SGST will be applicable. If the transporter were based in Chennai, IGST would apply.

Payment of Tax by a GTA

GST payments can only be made through cash via standard methods such as card, net banking, UPI, IMPS (for taxes up to ₹10,000), or physical cash.

Input Tax Credit for GTA

If GTA Pays GST

A GTA has two options for paying GST:

• 12% GST with the ability to claim Input Tax Credit (ITC) or
• 5% GST without the ability to claim ITC.

However, the GTA must declare its chosen option at the beginning of the financial year.

As per Notification No. 20/2017-Central Tax (Rate) dated August 22, 2017.

If Service Receiver Pays GST Under RCM

Service receivers can always claim ITC on GST paid under RCM, whereas the GTA cannot claim ITC in such scenarios.

Returns to be Filed by a GTA

If all services provided by a GTA fall under RCM, the GTA is not required to register. If a GTA chooses to register, it must file the following returns:

• GSTR-1 and GSTR-3B (filed monthly or quarterly, depending on turnover)
• GSTR-9 (filed annually).

Addressing Complex Scenarios in GTA Services

Accurate HSN code reporting is essential when transporting complex goods, such as those involved in multi-modal transport or bundled consignments.

Multi-modal Transport

When multi-modal transport is involved (e.g., combining rail and road), each mode may necessitate separate HSN reporting based on the specific nature of the goods being transported.

Bundled Goods

For services involving bundled goods, it is crucial to accurately report the HSN codes for each individual item within the bundle.

Specialised Goods

For highly specialized goods, ensuring the correct HSN code is provided is paramount.

Penalties for Non-Compliance with GTA Provisions

Non-compliance with GTA regulations can lead to various penalties:

Late Filing Fees

Failing to file GST returns by the due date incurs a penalty of ₹200 per day (₹100 for CGST + ₹100 for SGST), capped at ₹5,000.

Incorrect HSN Reporting

Failure to correctly report HSN codes in GSTR-1 can result in fines of up to ₹10,000 or the amount of GST evaded, whichever is higher.

Non-Payment of RCM Liability

Non-compliance with RCM provisions can attract penalties and interest on the unpaid tax amount, in addition to late fees.

Frequently Asked Questions

Historically, the concept of RCM for GTAs also existed under service tax. Pure transportation services are often provided by the unorganized sector, which has led to their specific exclusion from the tax net in many cases. For GTAs, the liability to pay GST primarily rests with the recipients under reverse charge. However, GTAs do have the option to pay under the forward charge mechanism.

Initially, transporters faced confusion due to the rule that "persons required to pay tax under reverse charge" must be compulsorily registered. This led some transporters to refuse services to unregistered dealers, fearing they would be forced to register. The government subsequently issued further clarifications and FAQs to GTAs, alleviating these confusions.