GST on Freight & Road Transport (GTA) 2025-26

Q: How does Reverse Charge Mechanism (RCM) work for GTA services?

Under RCM for Goods Transport Agency (GTA), the recipient of GTA services (if a registered GST person, factory, society, co-operative, body corporate, partnership firm, or casual taxable person) must pay GST instead of the GTA. The GTA itself does not charge GST on the invoice. The recipient pays 5% GST (no ITC) directly to the government via GSTR-3B. If GTA opts for 12% forward charge, RCM does not apply and GTA pays the tax and ITC is available to recipient.

Q: What is the difference between GTA and courier services under GST?

A Goods Transport Agency (GTA) is defined as any person who provides services in relation to transport of goods by road and issues a consignment note. Courier services (like Blue Dart, Delhivery for small parcels) are NOT treated as GTA — they attract 18% GST under SAC 9965/9968 and RCM does not apply. The key distinction is the issuance of a consignment note. Truck owners without consignment notes are not GTAs.

Q: Can a business claim ITC on freight charges paid to a GTA?

It depends on the rate chosen: (1) GTA charging 5% under forward charge — NO ITC for GTA; recipient also cannot claim ITC if paying under RCM at 5%. (2) GTA opting for 12% forward charge — GTA claims ITC on its inputs, and the recipient can claim ITC on the 12% GST paid. (3) Under RCM at 5% — recipients cannot claim ITC on self-assessed RCM tax paid on GTA services as per CGST Act restrictions for this specific entry.

Q: Is freight on export shipments zero-rated under GST?

Yes. Freight on export of goods is zero-rated under the IGST Act. Sea freight and air freight for exports are treated as zero-rated supplies. The exporter can either export under LUT without paying GST or pay IGST and claim refund. Additionally, services by way of transportation of goods by a vessel from a customs station in India to a place outside India are exempt from GST since FY 2022-23 (reinstated exemption). Always verify the current exemption notification.

Q: Does a truck owner (individual) need to register under GST?

An individual truck owner who is NOT a GTA (does not issue a consignment note) and whose annual turnover is below ₹20 lakh (₹10 lakh in special category states) does not need GST registration. If the truck owner hires their vehicle to a GTA or transport company (and does not issue consignment notes), the GTA bears the GST liability. However, if turnover exceeds the threshold or the owner directly provides GTA services, registration is mandatory.

Updated: 3 June 2026 | FY 2025-26 | CGST Act, RCM Notifications

GTA (road freight) attracts 5% GST with no ITC or 12% GST with ITC — GTA chooses annually. RCM applies: registered recipients pay GST directly to the government. Courier services: 18% GST. Air freight: 18%. Sea freight: 5%. Agricultural produce, food grains, milk, salt transport by road: exempt.

RCM

GTA services: recipient pays GST under Reverse Charge
5% GST (no ITC) or 12% GST (with ITC) — GTA opts at start of year

GST Rates on All Transport Modes — Quick Reference

Transport Mode / Service	SAC	GST Rate	RCM Applicable?	Exemptions / Notes
GTA road freight — 5% option	9965	5%	Yes (on registered recipients)	No ITC for GTA; RCM payer also cannot claim ITC
GTA road freight — 12% option	9965	12%	No (forward charge)	GTA claims ITC; recipient claims ITC on 12% paid
Courier services (Blue Dart, DTDC, Delhivery, etc.)	9968	18%	No	Not GTA — no consignment note issued as GTA
Air freight (domestic)	9965	18%	No	Passenger baggage transport included
Air freight (international / export)	9965	0%	No	Zero-rated under IGST Act
Sea freight (coastal / inland waterways)	9965	5%	No	ITC available at 5%
Rail freight (goods)	9965	5%	No	Charged by Indian Railways
Transport of agricultural produce by road	9965	Exempt	No	Rice, wheat, pulses, fruits, vegetables, etc.
Transport of milk, salt, food grains by road	9965	Exempt	No	Essential commodities
Single consignment < ₹1,500 (road)	9965	Exempt	No	Small consignment exemption
Transport of relief goods for natural disaster	9965	Exempt	No	Government-notified relief
Pipeline transport (petroleum/gas)	9969	18%	No	Treated as services through pipeline

GTA: 5% vs 12% — Which to Choose?

A Goods Transport Agency (GTA) must declare its GST rate option at the beginning of the financial year (or at the time of registration). The choice applies for the entire year and affects both the GTA and its customers.

Factor	5% GST (No ITC)	12% GST (With ITC)
Who pays GST	Recipient (RCM) or GTA	GTA (forward charge)
ITC for GTA	Not available	Available on diesel, tyres, truck maintenance
ITC for recipient	Not available (RCM)	Available on 12% GST paid
Cash flow impact on GTA	Lower (no GST outflow under RCM)	Higher (GTA pays tax, claims ITC refunds)
Best for	Small GTAs, spot market truckers	Large fleet operators with significant input costs

Who Must Pay Under RCM for GTA?

The following categories of recipients are liable to pay GST on GTA services under Reverse Charge Mechanism (RCM), provided the GTA has not opted for 12% forward charge:

Recipient Category	RCM Liability
Any factory registered under Factories Act	Yes — pays 5% GST under RCM
Society / trust registered under relevant Acts	Yes
Co-operative society established by law	Yes
Body corporate (company, LLP)	Yes
Partnership firm / AOP / BOI	Yes
Casual taxable person	Yes
Unregistered individual / HUF	No — GTA handles GST if applicable

Frequently Asked Questions

How does Reverse Charge Mechanism (RCM) work for GTA services?

Under RCM for Goods Transport Agency (GTA), the recipient of GTA services (if a registered GST person, factory, society, co-operative, body corporate, partnership firm, or casual taxable person) must pay GST instead of the GTA. The GTA itself does not charge GST on the invoice. The recipient pays 5% GST (no ITC) directly to the government via GSTR-3B. If GTA opts for 12% forward charge, RCM does not apply and GTA pays the tax and ITC is available to recipient.

What is the difference between GTA and courier services under GST?

A Goods Transport Agency (GTA) is defined as any person who provides services in relation to transport of goods by road and issues a consignment note. Courier services (like Blue Dart, Delhivery for small parcels) are NOT treated as GTA — they attract 18% GST under SAC 9965/9968 and RCM does not apply. The key distinction is the issuance of a consignment note. Truck owners without consignment notes are not GTAs.

Can a business claim ITC on freight charges paid to a GTA?

It depends on the rate chosen: (1) GTA charging 5% under forward charge — NO ITC for GTA; recipient also cannot claim ITC if paying under RCM at 5%. (2) GTA opting for 12% forward charge — GTA claims ITC on its inputs, and the recipient can claim ITC on the 12% GST paid. (3) Under RCM at 5% — recipients cannot claim ITC on self-assessed RCM tax paid on GTA services as per CGST Act restrictions for this specific entry.

Is freight on export shipments zero-rated under GST?

Yes. Freight on export of goods is zero-rated under the IGST Act. Sea freight and air freight for exports are treated as zero-rated supplies. The exporter can either export under LUT without paying GST or pay IGST and claim refund. Additionally, services by way of transportation of goods by a vessel from a customs station in India to a place outside India are exempt from GST since FY 2022-23 (reinstated exemption). Always verify the current exemption notification.

Does a truck owner (individual) need to register under GST?

An individual truck owner who is NOT a GTA (does not issue a consignment note) and whose annual turnover is below ₹20 lakh (₹10 lakh in special category states) does not need GST registration. If the truck owner hires their vehicle to a GTA or transport company (and does not issue consignment notes), the GTA bears the GST liability. However, if turnover exceeds the threshold or the owner directly provides GTA services, registration is mandatory.

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