Taxability of GTA services in case of supply of exempt and taxable goods in a same lorry

[HIMANSHU BHUSHAN]

How does the taxability of GTA services get affected when both exempt and taxable goods, such as rice (exempt) and spices (taxable), are transported in the same lorry under a single consignment note? Does the exemption on GTA services in case of supply of rice still apply, or is it negated due to the presence of taxable goods in the same consignment? If possible, please also provide the provisions or any notifications or circulars clarifying the same. 

[Sadanand Bulbule]

If frieght amount is separately charged for exempt goods and taxable goods, there is no need to charge GST on exempt goods. Only  freight amount on taxable goods attract tax in the hands of the GTA either under FCM or RCM as the case may be. In case, freght amount is lump sum charged under a sinlge GC Note, then the entire  freight amount becomes taxable.

[Sadanand Bulbule]

Further note that, in terms of Entry No.21[d] of Notification No.12/2017-Central Tax (Rate) dated 28/06/2017, transportation of " Rice" by the GTA is exempt. But in your case it is not the only goods being covered by a single GC Note. So the entire frieght amount charged for both rice and spices together under a single GC Note becomes taxable.

[YAGAY andSUN]

When a Goods Transport Agency (GTA) transports both exempt goods (like rice) and taxable goods (like spices) under a single consignment note, the exemption under Entry No. 21[d] of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 for transportation of rice does not apply. If the freight is charged separately for exempt and taxable goods, GST is payable only on the freight related to taxable goods. However, if a lump sum freight amount is charged under a single consignment note covering both exempt and taxable goods, the entire freight amount becomes taxable. This is because the exemption applies only when the consignment note covers solely exempt goods (rice). This position is supported by the GST rate notification and consistent with GST Council clarifications on mixed consignments under a single consignment note.

AI Summary

Taxability of GTA services: lump-sum freight for mixed consignments makes entire freight taxable; separate charges preserve exemption. Where freight for exempt and taxable goods is separately charged, GST applies only to the freight attributable to taxable goods and the portion for exempt goods remains non taxable. If a single consignment note covers both exempt and taxable goods and a lump sum freight is charged without allocation, the entire freight amount is taxable because the exemption applies only when the consignment covers solely exempt goods.