Goods Transport Agency services for e commerce deliveries: consignment note creates custody and liability, qualifying for GST exemption to unregistered recipients.

A Consignment Note issued by a transporter on receipt of goods for road movement constitutes legal evidence of receipt, transfer of custody and creates a lien, making the transporter liable for loss or damage until delivery; accordingly, services provided on that basis qualify as Goods Transport Agency (GTA) services even when subcontracted. Ancillary acts (loading, unloading, packing, transshipment, temporary warehousing) form part of the composite GTA supply. Where the consignee is not registered under GST, GTA services rendered to that unregistered person are eligible for exemption under entry Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate).

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Issues: (i) Whether the services of transporting goods ordered through e-commerce portals by road on issue of a consignment note qualify as Goods Transport Agency (GTA) services; (ii) Whether GTA services provided to unregistered customers ordering through electronic commerce operator portals are eligible for exemption under Entry Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended).

Issue (i): Whether the described transportation services qualify as Goods Transport Agency services.

Analysis: The definitional requirement for GTA under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 requires (a) provision of service in relation to transport of goods by road and (b) issuance of a consignment note. Issuance of a consignment note evidences receipt of goods for transport, transfer of custody, creation of lien and assumption of responsibility for safe delivery. Ancillary activities integral to road transportation may form part of the composite GTA service as clarified by Board Circular No. 234/28/2024-GST dated 11.10.2024 and prior clarifications on the distinction between GTA and courier services.

Conclusion: The described activity of transporting goods by road to customers on the basis of a consignment note qualifies as Goods Transport Agency services.

Issue (ii): Whether such GTA services provided to unregistered customers through electronic commerce operator portals are exempt under Entry Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended).

Analysis: Entry Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 exempts services provided by a goods transport agency to an unregistered person, subject to the specified exceptions. Where the recipient is unregistered and the service is classifiable as GTA (including ancillary services forming part of the composite supply), the exemption under Sl. No. 21A applies. The payment mechanism through the electronic commerce operator, privity of contract with the end-customer, and disclosure of transport charges in invoices do not detract from the identity of the recipient as unregistered for purposes of the entry.

Conclusion: GTA services provided to unregistered customers ordering through electronic commerce operator portals are eligible for exemption under Entry Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended).

Final Conclusion: The applicant's road transportation activity on issuance of a consignment note is classified as Goods Transport Agency services and such services provided to unregistered customers through e-commerce operator portals qualify for exemption under Entry Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended).

Ratio Decidendi: Issuance of a consignment note together with provision of transport of goods exclusively by road is determinative of classification as Goods Transport Agency services, and where the recipient is unregistered, such GTA services fall within Entry Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended) and are exempt from GST.

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