All You Need to Know – Exempted Items In Transport & Logistics Under GST

by CCH Online CCH Tax Online

The logistics and transportation sector has received a major push with the introduction of GST, thanks to removal of inter-state tax barriers leading to:

1. Better utilization of warehouse capacities

2. Warehouse consolidation

3. Attraction of more investment in the sector

4. Reduction of logistical costs by as much as 20% as estimated by Crisil Ltd.

While a majority of industries with relevant goods and services have come under the scope of this law, there is a particular list of items that is exempted from GST. This means that no GST is charged on these items

As per GST Notification No. 02/2017 - Central Tax (Rate) dated 28.06.2017 and Notification No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 (unless stated otherwise), the following items under logistics and transport of goods are exempt from GST:

1. As per Heading 9965, any service that provides transportation of goods by road exempted except if the service is:

i) A GTA (Goods Transport Agency), or

ii) A Courier Agency

2. As per Heading 9965 with effect from 25.01.2018 vide GST Notification No. 2/2018-Central Tax(Rate) dated 25.01.2018, services that transport goods from a place outside India till the customs station of clearance in India by an aircraft or a vessel are exempted.

3. As per Heading 9965, services that provide rail or vessel transportation within India of the following goods is exempted:

i) Disaster relief materials

ii) Defence, military or railway equipment

iii) newspaper or magazines registered with the Registrar of Newspapers

iv) agricultural produce and organic manure

v) milk, salt and food grain including flours, pulses and rice

As per Heading 9965 or Heading 9967, any goods transport agency that provides goods carriage of the above-mentioned items and the following items is also exempted:

i) goods consignment transported in a single carriage with consideration charges less than Rs. 1500

ii) goods transported for a single consignee with consideration charges less than Rs. 750

4. As per Heading 9965 with effect from 13.10.2017 vide Notification No. 32/2017-Central Tax(Rate) dated 13.10.2017, services provides by the goods transport agency to an unregistered person other than the following recipients is exempted:

i) Any factory registered under or governed by the Factories Act, 1948(63 of 1948)

ii) Any Society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India

iii) Any Co-operative Society or corporate established by or under any law for the time being in force

iv) Any partnership firm whether registered or not under any law including association of persons

v) Any casual taxable person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act

Items from other industries as well fall under the GST exemption list. This exemption is a necessary step taken by the policymakers to ensure the benefit of the masses.