GST on Freight Calculator
Determine GST liability, Reverse Charge Mechanism (RCM) applicability, and ITC eligibility for transport of goods in India.
Frequently Asked Questions
Understanding GST on freight and GTA services.
What is a Goods Transport Agency (GTA) under GST?
A GTA is any person who provides service in relation to transport of goods by road and issues a consignment note. If no consignment note is issued, the service provider is not considered a GTA, and their services are generally exempt from GST.
What are the GST rates for GTA services?
GTA services attract GST at either 5% (without ITC for the GTA) or 12% (with ITC for the GTA). The GTA must declare their chosen option at the beginning of the financial year.
When does Reverse Charge Mechanism (RCM) apply to freight?
RCM applies when a GTA transports goods for specified recipients (like registered businesses, factories, societies, or partnership firms) and the GTA has NOT opted for the 12% or 5% forward charge mechanism. In this case, the recipient pays 5% GST under RCM.
Who pays the GST under RCM for freight?
Under RCM, the person liable to pay the freight (either the consignor/sender or the consignee/receiver) is liable to pay the GST directly to the government.
Is GST applicable if I hire a local truck without a consignment note?
No. Transport of goods by road by an ordinary goods carriage (which does not issue a consignment note) is exempt from GST.
Can the recipient claim ITC if they pay 5% GST under RCM?
Yes, the recipient who pays 5% GST under RCM can claim full Input Tax Credit (ITC) if the transportation was for business purposes.
What is the GST on Courier services?
Courier agency services are subject to 18% GST under the Forward Charge Mechanism (FCM). RCM does not apply to courier services.
Are there any exemptions for GTA services?
Yes, GTA services are exempt when transporting specific goods like agricultural produce, milk, salt, food grain, organic manure, defense/military equipment, and relief materials.
What is Forward Charge Mechanism (FCM) in GTA?
Under FCM, the GTA collects the GST (either at 5% or 12%) from the customer on the invoice and deposits it with the government. The customer does not pay RCM.
Does a GTA need to register for GST if they only provide RCM services?
If a GTA provides exclusively those services where 100% of the tax is payable by the recipient under RCM, the GTA is exempt from obtaining GST registration.