Transport of goods on road is taxable in gst ?

[PN ELAMPARRUTHY]

A registered person own vehicle used for his business purpose to trnasporting of goods, in free time he used same vehicle for transport of goods for other charing only transport cost 

[Ryan Vaz]

Applicable Law / Notifications

• Section 7, CGST Act, 2017 – Scope of supply

• Section 9, CGST Act, 2017 – Levy of GST

• Section 2(26), CGST Act, 2017 – Definition of Goods Transport Agency (GTA)

• Notification No. 12/2017–CT (Rate) dated 28-06-2017, Entry 18 – Exemption for transport of goods by road (other than GTA / courier)

• Section 17(2) & Rule 42, CGST Rules, 2017 – ITC reversal for exempt supplies

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Short Practical Answer

GST depends on whether you are acting as a Goods Transport Agency (GTA) or not.

• If you are NOT issuing a consignment note ?
  Transport of goods by road is exempt from GST, even if you charge transport cost.

• If you ARE issuing a consignment note ?
  You become a GTA, and GST will apply (5% or 12% depending on ITC option).

AI Summary

Road freight transport without consignment note: GST exemption vs GTA status, ITC reversal u/s 17(2)/rule 42 upheld Transport of goods by road is exempt from GST where the transporter is not acting as a goods transport agency, i.e., no consignment note is issued, even if freight is charged. If a consignment note is issued, the transporter qualifies as a GTA under section 2(26) of the CGST Act, and the service becomes a taxable supply under sections 7 and 9, attracting GST at 5% or 12% depending on the input tax credit option. Where exempt transportation is provided, input tax credit attributable to such exempt supplies is subject to reversal under section 17(2) and rule 42.