What is the GST rate for goods transportation?
Goods can be transported by rail, vessel, ropeways, air, or road. For all these modes, the GST rate for the transportation of goods is 5% without Input Tax Credit.
However, in the case of multimodal transportation, the GST rate is 12% with an Input tax credit.
Please note that these rates are applicable for goods transportation other than by the Goods Transport Agency (GTA).
What is multimodal transportation?
“Multimodal transportation” means the carriage of goods, by at least two different modes of transport from the place of acceptance of goods to the place of delivery of goods by a multimodal transporter. Modes of transport means carriage of goods by road, air, rail, inland waterways or sea.
For the above definition, “Multimodal transporter” means a person who,-
(A) enters into a contract under which he undertakes to perform multimodal transportation against freight; and
(B) acts as principal, and not as an agent either of the consignor, or consignee, or of the carrier participating in the multimodal transportation and who assumes responsibility for the performance of the said contract.
In the case of multimodal transportation, the rate of GST is 12% with ITC. However, this rate applies only to the transport of goods from one place in India to another place in India. This clause does not apply in the case of the import or export of goods.
What is the GST rate for the transportation of goods in case of imports?
Transport of goods in a vessel including services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India attracts 5% GST without ITC.
What is the GST rate for the transportation of goods in the case of exports?
The GST rate for the transportation of goods in the case of exports is 5% without ITC. Earlier, there was a proviso to section 12(8) of the IGST Act which stated that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods.
Such proviso has been removed w.e.f. 01.10.2023. Also, sub-section 9 of section 13 of the IGST Act, 2017 is omitted w.e.f. 01.10.2023 which stated that the place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods.
Therefore, GST will be levied in the case of transportation of goods in case of exports w.e.f. 01.10.2023.
What are the GST rates applicable for Goods Transport Agency (GTA)?
Goods Transportation services supplied by GTA come under a reverse charge mechanism. However, GTA may opt to pay the GST by itself.
Following are the rates of GST applicable:
If GTA does not exercise the option to pay GST on the services supplied by it: GST @ 5% without ITC is to be paid by the service recipient under RCM.
If GTA exercises the option to pay GST on services supplied by it: GST @ 5% without ITC or 12% with ITC should be paid by the GTA under the forward charge mechanism.
What is the HSN code for the Transportation of goods under GST?
Conclusion
In conclusion, understanding the GST rates for goods transportation is essential for businesses to ensure compliance and manage costs effectively.
Whether it’s domestic transportation, imports, exports, or services provided by Goods Transport Agencies (GTAs), knowing the applicable rates and mechanisms is crucial.
By adhering to the prescribed rates and regulations, businesses can streamline their operations and avoid penalties, contributing to overall efficiency and financial stability.
