GST on Transportation of Goods by Road

1. Who is a Goods Transport Agency (GTA)?

Under GST, a Goods Transport Agency (GTA) is any person who provides service of transportation of goods by road and issues a consignment note. The consignment note is what separates a GTA from a simple truck owner — if no consignment note is issued, the service is treated as exempt.

• Individual truck owner with no consignment note → exempt from GST.
• Transporter issuing consignment notes → treated as GTA, GST applies.

2. GST rates: 5% vs 12%

A GTA can choose one of two rate structures at the beginning of the financial year:

3. Reverse Charge Mechanism (RCM)

When a GTA opts for 5% and supplies to any of the following specified recipients, GST is paid by the recipient under RCM — not by the transporter:

• Any factory registered under the Factories Act, 1948
• Any society registered under the Societies Registration Act
• Any co-operative society
• Any person registered under GST
• Any body corporate
• Any partnership firm (including LLPs and AOPs)
• Any casual taxable person

4. Exemptions worth knowing

• Transport of agricultural produce, milk, salt, food grains, organic manure.
• Consignment where total freight for a single carriage does not exceed ₹1,500.
• Freight for a single consignee not exceeding ₹750.
• Transport of relief material for disaster-affected areas, defence equipment.

5. E-Way Bill requirements

An E-Way Bill (EWB) is a digital document required for movement of goods worth more than ₹50,000, whether inter-state or (in most states) intra-state. Key rules for transporters:

• Generate EWB on ewaybillgst.gov.in before movement starts.
• Part-A: consignor / consignee / invoice details. Part-B: vehicle number and transporter ID.
• Validity: 1 day for every 200 km (24 hours for less). Extend before expiry if the vehicle breaks down.
• Update Part-B on trans-shipment or vehicle change; failure attracts penalty of ₹10,000 or tax evaded, whichever is higher.
• Unregistered transporters must enrol and obtain a 15-digit Transporter ID.

6. Invoice & consignment note essentials

A GTA invoice / consignment note must carry:

• Serial number, date, GSTIN of GTA and recipient (if registered).
• Consignor and consignee name and address.
• Registration number of the goods carriage.
• Description, quantity and gross weight of consignment.
• Place of origin and destination.
• Person liable to pay GST — consignor, consignee or GTA. Always mark this clearly to avoid RCM disputes.

7. Common mistakes to avoid

• Switching between 5% and 12% mid-year — the option must be exercised by 15th March for the next financial year.
• Claiming ITC on inputs while charging 5% — leads to demand and interest.
• Not mentioning “GST payable under RCM by recipient” on the invoice.
• Ignoring EWB Part-B update after vehicle change — a very common seizure trigger.
• Assuming individual truck owners need to register — most don’t, if no consignment note is issued.