GSTInvoice

GST Rates

GST on Transportation Services — GTA, Courier, Passenger & Freight

Transportation services in India have multiple GST rates depending on mode of transport and service type. Goods Transport Agencies (GTAs) mostly operate under Reverse Charge Mechanism. Courier and express services attract 18%. Passenger transport via rail and air has varying exemptions. Understanding these distinctions is critical for freight invoicing.

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GST Rates for Transport Services

Transport Type GST Rate SAC Code Notes
Goods Transport Agency (GTA) 5% (RCM) or 12% (forward) SAC 996511 Business recipients pay under RCM
Courier / express delivery 18% SAC 996812 No RCM
Rail freight (goods) 5% SAC 996511 Forward charge
Air freight (domestic) 18% SAC 996531
Passenger bus (state transport) Exempt — Government service
Air passenger (economy) 5% SAC 996411
Air passenger (business class) 12% SAC 996411
Auto-rickshaw / metered cab Exempt —

Goods Transport Agency (GTA) and RCM

A Goods Transport Agency (GTA) that issues a consignment note for transporting goods by road can opt for either forward charge (12% GST, with ITC) or Reverse Charge Mechanism (5% GST paid by recipient). Most GTAs choose RCM — meaning the recipient business (not the transporter) pays 5% GST on freight charges. The GTA then does not need to charge GST on its invoice. If the recipient is not registered under GST (e.g., an individual), the GTA must pay GST in forward charge. GTAs that exclusively transport unregistered persons are exempt.

Example

A Mumbai manufacturer hires a GTA to transport goods to Pune for ₹20,000 freight. Under RCM, the manufacturer self-assesses GST at 5% = ₹1,000 and pays it directly to the government. The GTA's invoice shows ₹20,000 freight — no GST charged. The manufacturer can claim ITC of ₹1,000 if goods are for taxable supply.

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FAQs

What is the GST rate for freight/GTA?

5% under RCM (paid by recipient) or 12% forward charge (paid by GTA). Most GTAs use 5% RCM.

What is a consignment note?

A consignment note is a document issued by a GTA acknowledging receipt of goods for transport. Issuing a consignment note is what classifies a transporter as a GTA under GST.

Is GST charged on courier services?

Yes, 18% GST on courier and express delivery services (SAC 996812). No RCM — the courier company charges GST on its invoice.

What GST applies to cab aggregators like Ola and Uber?

5% GST on rides booked through app-based aggregators. The aggregator collects and deposits GST on behalf of the driver under the e-commerce operator provisions.

Why Businesses Stop Using Excel for GST Invoices

Manual GST calculation mistakes

One wrong CGST/SGST split or a misapplied rate triggers notices and ITC denial for your buyer.

Slow invoice creation

Copying last month's Excel file, updating dates, recalculating — 20 minutes for what should take 30 seconds.

Formatting breaks on every device

Excel invoices look different on every printer and PDF converter. Clients complain about unreadable layouts.

No easy sharing or payment link

Sending PDFs over WhatsApp with no way for clients to pay directly slows down collections.

Incorrect tax type (IGST vs CGST+SGST)

Excel can't auto-detect intra vs inter-state supply. Wrong tax type = ITC rejected for your buyer.

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Disclaimer: The information in this article is for general informational purposes only and does not constitute professional tax, legal, or financial advice. GST rules and rates are subject to change. Consult a qualified CA or tax professional before making compliance decisions.

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