12% GST on Agreement of Supply of Services on Transportation of Goods by Road
The Maharashtra bench of the Authority for Advance Ruling held that 12% GST is applicable to the agreement of supply of services in relation to transportation of goods by road. The applicant, a company engaged in providing logistic consultancy services and logistics management services sought an advance ruling to clarify the classification of the services (whether under service codes 996511 or 996791or 996799 or any other) in case the applicant issues consignment note; however, the actual transportation is done through the third-party transporter (who also issues the consignment note). The Maharashtra bench of the AAR held that the service supplied by would be covered under Heading 9965 which covers 'Goods Transport vice', Sub Heading 99651 which covers 'Land Transport services of Goods' and further under SAC 996511. The AAR stated, "GST is applicable under Entry of the Notification 11/2017 (C.T.) Rate dated June 28, 2017, subject to conditions mentioned therein, i.e. a GST Rate of 5% will be applicable provided that credit of input tax credit charged on goods and services used in spring the services had not been taken and in the alternative GST Rate of 12% will be applicable, provided that the applicant, goods transport agency, opting to pay central tax 6% under this entry on all the services GTA supplied by the supplier."
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