Question21:

Services of transportation of goods by road (HSN 9965) under the GST regime may be categorized as follows:

1. Services supplied by a Goods Transport Agency (GTA): These are taxable at 5% on reverse charge basis or 12% on forward charge basis. Further, a GTA has been defined as a person who issues a consignment note in relation to transportation of goods. As per our understanding, entity not issuing a consignment note, falls under below residual entry of 18% except small / single truck operator/owner.

2. Other goods transportation services: These are residual services in relation to transportation of goods, not specifically covered by any other entry, taxable @ 18%.

In addition to the above, an exemption has been provided in relation to services of goods transportation by road in terms of Notification 12/2017-Central tax (Rate) (specially entry no. 18). To our understanding, this exemption pertains to small truck owners / individual lorry operators. Further, in terms of the logistics and transport FAQs released on CBEC website, it has been clarified that single truck owner-operators are eligible for the said exemption. But due to non-availability of proper explanation in aforesaid notification, ambiguity persist.

 Some of the Professionals are mis-interpreting this exemption given in Noft. No. 12/2017 as per their convenience.

 Please share your interpretation for this matter.

Answer 

The Exemption of S.no. 18 of Notification No. 12/2017- Central Tax (Rate) is given for the transportation of goods not done by Goods Transport Agency.

The term  Goods Transport Agency is defined in definitions below the above said notification as follows:-

"goods transport agency" means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called;
We understand that this exemption will be applicable in very restricted area where the transportation is done by a person who is not engaged in transportation of goods in routine.
Further, consignment note is a wide term which will be further debatable. So, in all the cases where ITC is available it is better to pay tax and take credit instead of going for Litigation.

In case where ITC is not available & GST paid is cost to you . Please assure that no document is issued by the transporter & payment is made to transporter through voucher. .(REPLY dt. 19/2/2018)