GTA - RCM or not

[Ethirajan Parthasarathy]

A goods transporter has charged ₹ 1000/- for transport of goods. But he has not issued any consignment note. Can a registered person take a stand that since the transporter has not issued consignment note, he does not fit into meaning of GTA & hence RCM tax is not paid.

[KASTURI SETHI]

Non-issuance of consignment does not absolve you from payment of GST on GTA under RCM. GTA is statutorily bound to issue consignment note. If GTA does not iissue consignment note, it is an offence.

[KASTURI SETHI]

See also Rule 54(3)CGST Rules, 2017

[Rajagopalan Ranganathan]

Sir,

According to sub-rule (30 of rule 54 of CGST Rules, 2017 "where the supplier of taxable service is a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage, the said supplier shall issue a tax invoice or any other document in lieu thereof, by whatever name called, containing the gross weight of the consignment, name of the consignor and the consignee, registration number of goods carriage in which the goods are transported, details of goods transported, details of place of origin and destination, Goods and Services Tax Identification Number of the person liable for paying tax whether as consignor, consignee or goods transport agency, and also containing other information as mentioned under rule 46.

Therefore GTA is liable to pay gst whether he issues a consignment note or not. He has to issue an invoice containing the details as prescribed in the above referred rule.

[Ganeshan Kalyani]

Generally when the goods are handed over to the transporter give an invoice or a consignment note or any other document which will prove that certain quantity of goods is moved in certain vehicle to certain party is required. Any document can be consignment note which will have details of the consignment. Thus merely on the ground of non issuance of consignment note cannot absolve the GTA from GST liability.

[Alkesh Jani]

Sir,

In this regards, please peruse the relevant portion of flier issued by the board,

“The legal position prevailing under Service Tax is being continued under the GST regime. The services of transportation of goods by road (except services of GTA) continue to be exempt even under the GST regime. In terms of Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 (sr.no.18), the following services are exempt from GST

Services by way of transportation of goods (Heading 9965)-

(a) by road except the services of-

(i) a goods transportation agency;

(ii) a courier agency;

(b) by inland waterways.

Thus, it is to be seen that mere transportation of goods by road, unless it is a service rendered by a goods transportation agency, is exempt from GST.

Under GST laws, the definition of Goods Transport Agency is provided in clause (ze) of notification no.12/2017-Central Tax (Rate) dated 28.06.2017.

(ze) “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;

Thus, it can be seen that issuance of a consignment note is the sine-qua-non for a supplier of service to be considered as a Goods Transport Agency. If such a consignment note is not issued by the transporter, the service provider will not come within the ambit of goods transport agency. If a consignment note is issued, it indicates that the lien on the goods has been transferred (to the transporter) and the transporter becomes responsible for the goods till its safe delivery to the consignee. It is only the services of such GTA, who assumes agency functions, that is being brought into the GST net. Individual truck/tempo operators who do not issue any consignment note are not covered within the meaning of the term GTA. As a corollary, the services provided by such individual transporters who do not issue a consignment note will be covered by the entry at s.no.18 of notification no.12/2017-Central Tax (Rate), which is exempt from GST.”

In view of above, It is requested to re-examine the issue with regards to above and query raised. It is to be noted that all case laws of pre-GST with regards to GTA and Transportation of goods by road will be applicable in GST also.

Thanks

[KASTURI SETHI]

Sh.Alkesh Jani Ji,

I do not disagree with you. Consignment note is one of the parameters/ conditions to qualify as GTA but what I want to say issuance of consignment is mandatory and non-issuance of the same must not be adopted as modus operandi in some guise.

Consignment note may have different nomenclature.Note the language by whatever name it is called.

[Ethirajan Parthasarathy]

I am thankful to all expert for their response.

AI Summary

Goods Transporters Must Issue Consignment Notes to Avoid GST Liability Under CGST Rules 2017; Non-Issuance Not Exempt A discussion on whether a goods transporter who does not issue a consignment note can be exempt from paying GST under the Reverse Charge Mechanism (RCM) as a Goods Transport Agency (GTA). Participants highlighted that non-issuance of a consignment note does not exempt the transporter from GST liability. According to CGST Rules, 2017, a GTA must issue a tax invoice or similar document, regardless of the consignment note's issuance. The issuance of a consignment note is crucial to qualify as a GTA, but non-issuance should not be used to evade GST obligations. Individual transporters not issuing consignment notes may be exempt from GST.