Service by gta to gta

[Shahnawaz Alam]

A registered truck owners having 5-10 trucks having attached their trucks with GTA (providing logistics services to corporate and charging 12% GST) are raising tax invoices and charging GST @ 12% on transportation bill with claiming input of Vehicle and expenses. Is this correct or wrong?

[Ganeshan Kalyani]

In my view, 18% GST would be applicable.

[KASTURI SETHI]

In this case, two services are involved. (i) Hiring of truck by GTA (ii) GTA is supplying service of transportation of goods by road to corporate body. Such GTA is working under FCM and not under RCM.

Hiring of truck is exempted.

[KASTURI SETHI]

Also see the decision of AAR, Karnataka reported as 2020 (1) TMI 572/AAR/Karnataka

Applicant :Saravana Perumal

Date of decision 27.12.19.

AI Summary

GST treatment of truck hire and GTA services: truck hire exempt, GTA's transport supply taxable under forward charge. The core operative position is that two services coexist: hiring of truck by the owner to the GTA is an exempt supply, while the GTA's supply of goods transport services to a corporate customer is a taxable supply. The GTA therefore operates under the forward charge mechanism for its transportation service and not under the reverse charge mechanism; this distinction affects the availability of input tax credit for vehicle-related expenses.