Exempt supply by GTA

[Rajat Gupta]

XYZ is registered as GTA under the GST Act. Apart from goods transport service under RCM basis, it also provides its own vehicle on hire to other GTAs, which happens to be an exempt supply. Is XYZ also required to issue bill of supply for such vehicles provided on hiring basis?

[PRIYACHARAN SR]

The hiring of vehicles by a Goods Transport Agency (GTA) is exempt under GST as per Entry No. 22 of Notification No. 12/2017 – Central Tax (Rate) dated June 28, 2017. This entry specifically exempts services by way of giving on hire a means of transportation of goods to a goods transport agency.

 

Since its an exempt supply issuing a bill of supply is mandatory as per section 31(3). 

 

Disclaimer : IMO, please proceed as feasible.

[Shilpi Jain]

Why at all registration is required under GST. Can consider surrendering registration, in which case no documents prescribed under GST need to be issued. Commercial invoice can be issued.

However, if registered under GST then for the hire transaction BoS required to be issued.

[Mary Bridges]

Yes, since XYZ is providing an exempt supply (hiring of vehicles), it is required to issue a bill of supply as per GST rules. Exempt supplies don’t attract GST, but proper documentation is still necessary for compliance. 

AI Summary

Bill of supply requirement: Exempt hiring of vehicles by a goods transport agency still mandates issuance of bill of supply.
A registered Goods Transport Agency that hires its own vehicles to other GTAs is making an exempt supply under the applicable notification; despite no tax liability, it must issue a Bill of Supply under section 31(3). If the supplier surrenders GST registration, GST-prescribed documentary obligations cease, but while registered the GTA must issue the Bill of Supply for the hire transaction.