Transportation is key to India’s economy, linking markets and boosting trade. GST on transport services has reshaped the tax structure, affecting costs and operations. GST rates differ by service type and are categorized under HSN codes, simplifying compliance for businesses.A Goods Transport Agency (GTA) plays a significant role in the logistics sector by providing transportation services for goods. Under the GST regime, GTAs are subjected to various compliance requirements to ensure accurate tax reporting and avoid penalties.
What is a GTA?
As per Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017, “goods transport agency” or GTA means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.
This means, while others might also hire out vehicles for goods transportation, only those issuing a consignment note are considered as a GTA. Thus, a consignment note is an essential condition to be considered as a GTA.
GST on Road Transport Services for Goods (GTA, non-GTA)
Types of Road Transport Services | GST Rate |
| Public Transport for passengers | NIL |
| Transport through metered auto rickshaw, e-rickshaw, or taxi | NIL |
| Transport through Non-AC Contract Carriage or Stagecoach | NIL |
| Transport through AC Contract Carriage or Stagecoach (without Input Tax Credit) | 5% |
| Transport through radio taxi and similar other services | 5% |
| Transport through rental services for cars, buses, coaches, | 18% |
A Goods Transport Agency (GTA) refers to any entity providing services related to the transport of goods by road and issuing a consignment note.
The GST on transportation charges of goods by a GTA (Goods Transport Agency) are:
- 5% GST if Input Tax Credit (ITC) is not availed.
- 12% GST if ITC is availed.
GST rates for GTAs vary based on the type of goods transported and the value of the consignment.
GST on Transport: Rail Services in 2025
In 2025, GST applies to rail transport services based on the class of travel. For passenger tickets booked in First Class or air-conditioned classes (1st AC, 2nd AC, 3rd AC, AC Chair Car), a 5% GST is charged. However, tickets booked in other classes, such as Sleeper, Second Class, or General, are exempt from GST.
This differentiation ensures that basic travel options remain accessible, while premium travel services are subject to tax.
GST on Transport: Air Services in 2025
GST on air transport services is categorized based on the type of air travel service, with varying rates applied to different ticket classes:
GST on Economy Class Air Tickets
Economy class air tickets are subject to a 5% GST on Transport, designed to make essential travel more affordable.
GST on Business Class Air Tickets
Business class air tickets incur a higher GST rate of 12%, reflecting the premium nature of the service provided.
GST on Chartered Flights for Pilgrimage
Chartered flights for pilgrimage purposes are also subject to a 5% GST rate, promoting accessibility for religious travel.
GST on Rental Services of Aircraft (with or without operator) / Chartered Flights
Rental services of aircraft, whether with or without an operator, attract an 18% GST rate, ensuring a consistent tax framework for these services.
GST on Air Transportation Services for Cargos
For air cargo transportation, a uniform GST rate of 18% is applied. This standardization ensures consistent taxation across air freight services, facilitating smoother operations in the logistics sector.
GST on Transport: Water Service in 2025
GST on Water Transport Services for Passengers
Water transport services for both goods and passengers generally incur a GST rate of 5%. However, this rate does not allow for input tax credit (ITC), meaning businesses cannot claim back the tax paid on these services. This standard rate aims to simplify tax compliance while maintaining cost-efficiency for users of water transport.
GST on Water Transport Services for Cargos
GST on transport charges including rental services for water vessels, including freight vessels (with or without an operator), is 18%. This GST rate applies to the leasing or hiring of vessels used for various purposes, including transportation and logistics.
What is the GST rate on GTA services?
| Service by a GTA | GST rate |
| Carrying-agricultural produce, milk, salt and food grain including flour, pulses and rice, organic manure, newspaper or magazines registered with the Registrar of Newspapers, relief materials meant for victims of natural or man-made disasters, defence or military equipment | 0% |
| Carrying- goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage is less than Rs. 1,500 | 0% |
| Carrying- goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs. 750 | 0% |
| Any other goods | 5% No ITC or 12% with ITC |
| Used household goods for personal use | 0% ** |
| Transporting goods of unregistered persons | Earlier exempted, but later made taxable; currently, list yet to be notified** |
| Transporting goods of unregistered casual taxable persons | Earlier exempted, but later made taxable; currently, list yet to be notified** |
| Transporting goods (GST paid by GTA)* | 5% No ITC or 12% with ITC |
| Transporting goods of 7 specified recipients* | Irrespective of GTA choosing 12% (with ITC) and 5% (without ITC), if the GTA opts for paying tax on forward charge by giving a yearly declaration^, then it appears in the tax invoice. If that declaration is not given, then GTA has chosen for the reverse charge where the recipient must deposit tax and ITC cannot be availed by the GTA. |
| Hiring out vehicle to a GTA | 0% |
FAQs
Q1. Who pays GST while hiring a GTA?
If a GTA provides the services to the certain businesses, recipient of services is required to pay GST under reverse charge.
Q2. Which businesses are liable to pay GST under reverse charge for a GTA?
The following businesses (recipient of services) is required to pay GST under reverse charge:-
- Factory registered under the Factories Act,1948;
- A society registered under the Societies Registration Act, 1860 or under any other law
- A co-operative society established under any law;
- A GST registered person
- A body corporate established by or under any law; or
- A partnership firm whether registered or not (including AOP)
- Casual taxable person
Q3. who is liable to pay GST in case of a GTA?
| Service Provider | Supplier/ Consignor | Receiver of goods/ Consignee | Person paying Freight | Person liable to pay GST |
| GTA | A company (Whether or not registered under GST) | Partnership Firm (Whether or not registered under GST) | Company | Company |
| GTA | Partnership Firm (Whether or not registered under GST) | Registered Dealer X | X | X |
| GTA | Partnership Firm (Whether or not registered under GST) | Registered Dealer X | Firm | Firm |
| GTA | A Co-Op Society Ltd (Whether or not registered under GST) | Registered Dealer X | X | X |
| GTA | A Co-Op Society Ltd (Whether or not registered under GST) | Registered Dealer X | A Co-Op Society Ltd | A Co-Op Society Ltd |
| GTA | Company A Ltd. (Whether or not registered under GST) | Company B Ltd. (Whether or not registered under GST) | B Ltd | B Ltd |
| GTA | URD A | Registered Dealer X | A | X |
| GTA | URD A | Registered Dealer X | X | X |
| GTA | URD A | URD F | F | Exempted** |
Q4. What is a consignment note?
A consignment note is a document issued by a goods transportation agency against the receipt of goods for the purpose of transporting the goods by road in a goods carriage. If a consignment note is not issued by the transporter, the service provider will not come within the ambit of the goods transport agency.
If a consignment note is issued, it means that the lien on the goods has been transferred to the transporter. Now the transporter is responsible for the goods till it’s safe delivery to the consignee.
A consignment note is serially numbered and contains –
- Name of consignor
- Name of consignee
- Registration number of the goods carriage in which the goods are transported
- Details of the goods
- Place of origin
- Place of destination.
- Person liable to pay GST – consignor, consignee, or the GTA.
Q5. What is the GST on transportation charges by a GTA?
The GST on transportation of Goods under GTA (goods transport agency) is:
- 5% GST if Input Tax Credit (ITC) is not availed.
- 12% GST if ITC is availed.
Q6. What is the transporter ID in GST?
The transporter ID is a unique identification number assigned to transporters for GST purposes, used for tracking and compliance.
Q7. Do different types of transport services have different GST rates?
Yes, different types of transport services, such as air, rail, and water, have varying GST rates based on the nature of the service and its classification.
