Stepwise Process for Opting Forward Charge & Filing Annexure V To choose Forwarding Charge, a Goods Transport Agency (GTA) must provide a declaration before March 15 of the preceding fiscal year.Īdditionally, if the GTA opts to pay GST under Forwarding Charge, the supplier must issue a tax invoice to the recipient at the applicable rate and include the declaration. Requirements for Opting for Forwarding Charge under GST for Goods Transport Agencies (GTA) If GTA exercises the option to pay GST i.e., under the Forwarding charge. If GTA does not exercise the option to pay GST i.e., Recipient pays under the reverse charge mechanism. The option to continue with the 5% rate under reverse charge mechanism remains available, and agencies can switch from one option to another at the start of the fiscal year. However, The 47th GST Council meeting has introduced changes, allowing Goods Transport Agencies to pay GST at either 5% or 12% on their consignments under Forwarding Charge. To put it simply, GST is applicable to GTA services at either 5% through Reverse Charge Mechanismor 12% with Input Tax Credit through Forwarding Charge Mechanism under CGST. The previous GST rate for the transportation of goods was either 5% without tax credit or 12% with tax credit. Overview of Changes in GST for Transport of Goods
The issuance of a consignment note by the transporter signifies that the goods’ lien, or the right to possess the property, has been transferred to the transporter.Ĭonsequently, the transporter assumes responsibility for the secure delivery of the consignment to the consignee. Hence, it is important for suppliers of transport services to have consignment notes. What is GTA?Īn individual or entity that provides transportation services by road and provides a consignment note is defined as a Goods Transport Agency according to the Finance Act of 1994. This is where Goods Transport Agencies (GTAs) come into play. However, any disruptions in this sector can have a massive impact on the entire supply chain, making it essential to understand the key players involved in the transportation of goods. With roadways being the primary mode of transportation, it is responsible for the movement of a significant portion of the country’s freight and passenger traffic. As you already know, transportation has a major role in the Indian Economy.
This article will guide you about GST on Forward Charges by GTA.
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