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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.
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.
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.
1. 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:
Details |
GST Rate Applicable |
|---|---|
Economy Tickets |
5% |
Tickets for the purpose of pilgrimage |
5% |
Business Class Tickets |
12% |
Aircraft Rentals/Flights that are chartered |
12% |
2. Applicable GST Rate on Road Transport
Attached below are the current rates for travel via road:
Details |
GST Rate Applicable |
|---|---|
Public Transport |
Nil |
Transport via rickshaw/taxi |
Nil |
Transport via Non-AC Stagecoach/Non-AC Contract Carriage |
Nil |
Transport via AC Stagecoach/AC Contract Carriage |
5% |
Transport via Radio Taxi |
5% |
Transport via rental cars, coaches, and buses |
18% |
3. Applicable GST Rate on Water Transport
18% GST will be applicable on rental services of water vessels including freight vessels (whether with or without operator).
4. Applicable GST Rate on Rail Transport
Attached below are the current rates for travel via rail:
Details |
GST Rate Applicable |
|---|---|
First Class/AC Tickets |
5% |
General/Sleeper Class Tickets |
5% |
Metro Tickets |
12% |
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.
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%.
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.
When it comes to the transportation of goods, there are two important documents – a consignment note and an eWay bill. A consignment note is 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.
This document accompanies the goods that are to be transported by road and is often filled out by the shipper. The consignment note also acts like a proof that a contract for carriage has been filed and describes its respective content. It also doubles up as a receipt when goods are picked up from the shipper and delivered to the recipient.
A consignment note should be serially numbered and should have the following information–
Name of consignor and consignee
Details of the goods
Registration number of the goods carriage in which the goods are transported
Place of destination
Place of origin
Person liable to pay GST – consignor, consignee, or the GTA.
As per Notification No. 5/2017- Central Tax dated 19/06/2017, any individual who is engaged in only making supplies of taxable goods and/or services on which Reverse Charge Mechanism (RCM) applies is exempt from obtaining registration under GST.
Thus, you needn’t register your GTA under GST if you are exclusively transporting goods where the recipient is required to pay the total tax as per the reverse charge basis (even if the turnover exceeds the threshold limit).
Unregistered dealers who are purchasing goods and/or services from unregistered Goods Transport Agencies, they do not have to pay GST under the reverse charge mechanism. If an unregistered dealer hires or makes a purchase from a registered GTA, then the registered GTA will be liable to pay GST.
Any GST-compliant invoice by a GTA must contain following details-
Name of the consignor
Name of the consignee
Description of service
Details of goods transported
Registration number of goods carriage in which the goods are transported
Gross weight of the consignment
Details of place of origin and destination
Signature of the supplier
GSTIN of the person liable for paying tax whether as consigner, consignee or goods transport agency
Date of issue
Whether GST is payable on reverse charge basis
Name, address and GSTIN (if applicable) of the GTA
Tax invoice number
Taxable value of supply
Applicable rate of GST
Tax Amount
The GTA, under Goods and Services Tax norms, also levies a certain charge for the transportation of goods, as elucidated below:
Service Offered by the GTA |
Rate of GST |
|---|---|
Transporting milk, food grains, salt, agricultural produce, pulses, and newspapers (registered with the Registrar of Newspapers), defence equipment, and relief materials for victims of calamities |
NIL |
Transportation of goods wherein the charge for transportation is less than Rs. 1500 |
NIL |
Transportation of goods wherein the charge for transportation is less than Rs. 750 |
NIL |
Any other goods not listed above |
5% without ITC, 12% with ITC |
Household goods that have already been used, for personal consumption |
NIL |
Transportation of goods related to unregistered persons |
Yet to be notified |
Transportation of goods related to unregistered casual taxable persons |
Yet to be notified |
Transportation of goods pertaining to 7 specified consignees |
If the GTA levies 12%, ITC can be availed when taxes are filed. If the GTA charges 5%, RCM is applicable, and ITC cannot be availed in this case |
Hiring of a vehicle by GTA |
NIL |
Timely transportation of goods is an essential component to the growth of any economy and essential to maintain the demand and supply chain. It is also an important contributor 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.
You would only have to pay GST if you operate a Goods Transport Agency (GTA). Services of transportation of goods by any individuals other than a GTA are exempt from paying GST. Thus, GST will only be compulsory if you're a transporter who is a registered GTA.
Transportation of goods by an individual or an entity who is not a Goods Transport Agency (GTA) is exempted from paying GST.
The individual or entities who are the recipients of a freight service are liable to GST on freight. In simple words, the individual or entities who take up the transportation expenses will be liable to pay GST on freight. In other words, if the consignee or the receiver bears the freight charges to the GTA, then the consignor will be expected to pay relevant and applicable GST.
Yes, all taxpayers are required to comply with e-invoicing for the financial year 2022-23 in case their e-invoice limit or turnover exceeds the exemption limit in any financial year from 2017-18 to 2021-22. Also, the total turnover will consist of the turnover of all GSTINs under a single PAN across India.
The threshold for GST registration has been increased to ₹40 Lakhs for supply of goods.
Goods Transport Agencies can avail ITC, or input tax credit on transportation.
GST on the transportation of household goods by road ranges from nil to 18%. For example, transport through e-rickshaw does not attract GST, while transport through rental services comes with 18% GST.
As per the GST law, in case the freight is exclusive and charged separately, then the GST rate on transport is 5%. But keep in mind that some specific items are exempted under GST.
Services that are provided by a GTA, or Good Transport Agency, are taxable under GST. However, transportation of goods by an individual is exempt from GST.
GST registration is required for a transporter if their aggregate turnover in a financial year exceeds ₹10 Lakhs or ₹20 Lakhs in case of a unique category.
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