Bulk transportation like by road, air and water comes in freight category, as like other sectors in India like manufacturing, retail, pharma etc. freight sector also effected by GST. In this blog post we explain about the changes in tax structure comes after GST implementation.
LIST OF FREIGHT SERVICES EXEMPTED FROM GST:
LIST OF FREIGHT SERVICES EXEMPTED FROM GST:
- Defence/Military Equipment transport.
- Agricultural Produce Transportation.
- Organic Manure Transport.
- RNI registered news paper and magazine transportation.
- Milk, food grains like salt, rice, pulses and flour transportation.
- Relief materials for accident or disaster victims (including natural or man-made disasters, calamities or mishaps) transportation.
- Single carriage transportation where the cost of transport less than 1500 rs.
Now those not listed above have to pay 5% GST charges.
- GST will be depends on the value of goods supply only. If freight charges are added in the value of goods than GST be charges only on Freight.
- The GST on freight is paid by the recipient of the service means that who pays the freight.
When the freight service is provided by a GTA to any of the following specified persons, the service recipient will be liable to pay GST on the reverse charge basis.
- A person registered under GST
- A factory registered under the Factories Act, 1948
- A co-operative society established by or under any law
- A body corporate established by or under any law
- A Society registered under Societies Registration Act, 1860 or under any other law for the time being in force in any part of India
- A partnership firm, whether registered or not under any law, including association of persons
- A casual taxable person
All those persons must be registered under GST whether they reach the threshold in a year or not.These persons will also be eligible for input tax credit under GST.
When a GTA is liable to pay tax on a freight service provided by him, he basically has the following two options.
1. Pay tax @ 5% with no input tax credit
2. Pay tax @ 12% with full input tax credit
2. Pay tax @ 12% with full input tax credit
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