GST on Transportation

GST on transportation is applicable on goods and on passengers as well, be it via air, road, rail, and all other forms of transport. Transportation is a vital aspect of any economy, as any hindrance in the same has far-reaching effects on the economy. The transport GST rate varies from 0 to 18% and does have an impact on the price of tickets pertaining to all forms of transport. 

What are the Significant Modes of Transportation in India?

There exist 4 primary modes of transportation in India, namely air, rail, road, and sea.

• Air: The quickest form of transport, travel by air does attract certain additional costs, such as duty fees, handling fees, security fees, and taxes.

• Rail: Given that this is a fairly quick mode of transport, it is perfect for the transportation of perishable goods.

• Road: Mainly used for goods that need to be transported within and across states, it is the most common form of transportation in India.

• Sea: When it comes to transporting large consignments of goods, this is the most preferred form of transportation. However, it does take a much longer time to transport goods via waterways.

GST on Transportation Through Various Modes

The GST on transportation charges varies based on each transportation mode, from 0 to 18%. Listed in the sections below are the transport GST rates for various modes of transport.

Applicable GST Rate on Air Transport

The GST on transportation charges are revised by the government on a routine basis. Attached below are the current rates for travel via air:

Applicable GST Rate on Road Transport

Attached below are the current rates for travel via road:

Applicable GST Rate on Rail Transport

Attached below are the current rates for travel via rail:

Learn more about GST tax slabs in our detailed article GST Rates in India.

Exemptions for GST on Transport

There is a certain list of goods exempted from GST on transportation charges. They include:

• Newspapers and magazines that are registered with the Registrar of Newspapers

• Milk, pulses, flour, salt, rice, food grains

• Defence Equipment

• Agricultural products and produce

• Organic manure

• Relief material in the case of calamities

• Cases where the bill on transportation is less than Rs. 1500

• Household goods

• Goods of unregistered persons

Depending on the goods & services, certain goods and services are exempted from GST, check our detailed article on GST Exemption. 

Other Transportation Services and GST Charges Applicable

When it comes to the transportation of goods, it can be undertaken by a Goods Transport Agency (GTA) or by Transport Owners. The GST on transportation charges in such cases varies from 5% to 18%.

What is a Good Transport Agency (GTA) in GST?

A GTA, or a Goods Transport Agency, is one that authorises a ‘consignment note’ and offers services pertaining to the transportation of goods. The GTA acts as a service provider, helping transport the goods via other’s vehicles, and not vehicles of their own. In the case of a transporter, they use their own vehicles to transport goods. A GTA offers a range of services, such as packing, unpacking, loading, unloading, temporary warehouse facilities, and trans-shipment.

What is a Consignment Note?

When it comes to the transportation of goods, there exist two primary documents of importance – a consignment note and an eWay bill. A consignment note refers to a document that is issued by the GTA and acts as proof of goods received for transportation via road. Once the consignment note has been issued, it means that the onus of transporting and delivering the goods to the consignee falls on the transporter. 

GST on Transport of Goods by GTA

The GTA, under Goods and Services Tax norms, also levies a certain charge for the transportation of goods, as elucidated below:

Conclusion

Timely transportation of goods is a vital component to the growth of any economy, aiding in rapid industrialisation and growth. While the government has imposed GST on transportation charges, this has a marginal effect on prices, simultaneously helping the government earn revenue.