Goods transport agency (GTA) services can be taxed under reverse charge, where the specified recipient pays 5% GST, or under forward charge, where the GTA charges 5% (without ITC) or 12% (with ITC). A GTA opts for forward charge by filing an annual declaration (Annexure V).
The default: reverse charge at 5%
Where a GTA transports goods by road and does not opt for forward charge, the specified recipient (a registered person, company, factory, society, etc.) pays GST at 5% under reverse charge (Notification 13/2017). The GTA does not charge GST; the recipient self-assesses, pays in cash, and claims ITC if the freight is for taxable business.
The forward-charge option
| Option | Rate | ITC to GTA | Who pays |
|---|---|---|---|
| Reverse charge (default) | 5% | No | Recipient |
| Forward charge — 5% | 5% | No | GTA charges |
| Forward charge — 12% | 12% | Yes | GTA charges |
A GTA chooses forward charge for a financial year by filing Annexure V by the prescribed date; the choice then applies for the year.
Which option to use
A GTA with significant input GST (fuel ITC is restricted, but trucks, tyres, services) may prefer the 12% with ITC route. A GTA with little input tax often stays at 5%. For the recipient, RCM at 5% with ITC is usually cost-neutral. The decision affects pricing and should be aligned across contracts.
Exemptions and notes
- Transport of certain goods (e.g. agricultural produce, milk, where notified) is exempt.
- Consignments where the freight per carriage is below the notified small limit may be exempt.
- The consignment note is the defining document of a GTA (vs a mere transporter).
- Verify the current Annexure V filing deadline and any rate changes.
Key takeaways
- Default: recipient pays 5% under reverse charge.
- GTA can opt forward charge: 5% (no ITC) or 12% (with ITC).
- Forward charge is chosen annually via Annexure V.
- RCM-paid 5% is creditable to the recipient if for taxable business.