Published 18 October 2026
A trucking business and its customers each need to know two things: who pays the GST on a road freight bill, and at what rate. The answer depends on facts about both sides. Has the transporter issued a consignment note? Has it filed a declaration before the year began? Is the customer a factory, a company or a registered person? Was the consignment of a kind the law exempts? A 2022 overhaul and the 2025 rate changes have each altered the answer.
This guide sets out the scheme for goods transport agencies (GTAs) as it stands on 18 October 2026. The general mechanics of paying tax under reverse charge, and of taking credit for it, are in Reverse Charge for Businesses.
What makes a transporter a GTA
Paragraph 4 of Notification No. 11/2017-Central Tax (Rate) defines the term, in clause (xxxx) as substituted by Notification No. 15/2025-Central Tax (Rate) from 22 September 2025:
‘goods transport agency’ means any person who provides service in relation to transport of goods by road and issues a consignment note by whatever name called, but does not include (i) electronic commerce operator by whom services of local delivery are provided; (ii) electronic commerce operator through whom services of local delivery are provided.
The consignment note is the test. A truck owner who hires out a vehicle without issuing one supplies renting of a goods carriage or plain transport, not GTA service. Hire of a goods carriage to a GTA is exempt under entry 22 of Notification No. 12/2017-Central Tax (Rate). Renting of a goods carriage with fuel included is at item (ia) of serial number 10 of Notification 11/2017: 5 per cent without credit, or 18 per cent. The 2025 exclusion takes e-commerce local-delivery platforms out of the definition. Notification No. 12/2017 carries the same definition, in paragraph 2(ze), substituted by Notification No. 16/2025.
The two routes since 18 July 2022
Notification No. 03/2022-Central Tax (Rate) substituted item (iii) of serial number 9 of Notification 11/2017 from 18 July 2022. The present text, with the amendments of 2023 and 2025, has two sub-items.
(a) The GTA does not opt to pay tax itself. The rate is 2.5 per cent central tax (5 per cent in all), on condition that “the credit of input tax charged on goods and services used in supplying the service has not been taken”. In practice the recipient pays it under reverse charge where the recipient is in the list described below.
(b) The GTA opts to pay tax itself under forward charge. It charges 2.5 per cent central tax (5 per cent in all) or 9 per cent (18 per cent in all). Condition (1) states that, “in respect of supplies on which GTA pays tax at the rate of 2.5%, GTA shall not take credit of input tax”. Notification 15/2025 substituted “9” for “6” in this sub-item from 22 September 2025. The forward-charge option with credit was therefore 12 per cent from 18 July 2022 to 21 September 2025, and has been 18 per cent since.
Before July 2022 the 12 per cent option existed in a different form. Notification No. 20/2017-Central Tax (Rate) had added it to item (iii) in August 2017, and serial number 1 of Notification 13/2017 then excluded a GTA “who has not paid central tax at the rate of 6%”. That condition was removed in 2022, when the annual declaration replaced it.
The declaration: Annexure V, and Annexure VI to go back
Condition (2) of sub-item (b) states how the option is exercised. As amended by Notification No. 06/2023-Central Tax (Rate) from 27 July 2023, it is exercised by a declaration in Annexure V “on or after the 1st January of the preceding Financial Year but not later than 31st March of the preceding Financial Year”. So the window for 2027-28 is 1 January to 31 March 2027.
Notification 06/2023 also made the option continuing. It “shall be deemed to have been exercised for the next and future financial years unless the GTA files a declaration in Annexure VI to revert under reverse charge mechanism”, within the same January-to-March window. Annexure VI states that the reversion “shall not be allowed to be changed within a period of one year”.
A GTA that starts business, or crosses the registration threshold, during a year has its own time limit. Notification No. 05/2023-Central Tax (Rate) lets it file Annexure V “before the expiry of forty-five days from the date of applying for GST registration or one month from the date of obtaining registration whichever is later”. The same notification fixed 31 May 2023 for the year 2023-24. Earlier years had their own dates: 15 March before 2023, and 16 August 2022 for 2022-23.
Both annexures are addressed to the jurisdictional GST authority. They carry the GTA’s legal name, GSTIN, PAN and the signature of an authorised representative. GSTN’s advisory of 1 January 2024 announced online filing. After login, the path is Services > User Services > GTA, with separate options for Annexure V and Annexure VI. For new registrants, the advisory says the due date is shown on the dashboard. GTAs who had filed Annexure V for 2023-24 manually were asked to upload the acknowledged copy.
The recipients who pay under reverse charge
Serial number 1 of Notification No. 13/2017-Central Tax (Rate) makes the recipient liable where a GTA supplies transport of goods by road to any of the following, located in the taxable territory:
- a factory registered under or governed by the Factories Act, 1948
- a society registered under the Societies Registration Act, 1860 or any other law
- a co-operative society established by or under any law
- any person registered under the CGST, IGST, SGST or UTGST Act
- a body corporate established by or under any law
- a partnership firm, registered or not, including an association of persons (an LLP counts as a partnership firm, by clause (e) of the Explanation, inserted by Notification No. 22/2017)
- a casual taxable person
There are two exclusions. First, under a proviso inserted by Notification No. 29/2018, the entry does not apply to government departments, local authorities and governmental agencies registered only to deduct tax under section 51. Second, under a proviso inserted by Notification No. 05/2022 from 18 July 2022, it does not apply where the GTA “has taken registration”, has opted for forward charge, and “has issued a tax invoice to the recipient charging Central Tax at the applicable rates” carrying the Annexure III declaration. Annexure III, as amended by Notification No. 08/2023, reads:
I/we have taken registration under the CGST Act, 2017 and have exercised the option to pay tax on services of GTA in relation to transport of goods supplied by us from the Financial Year ____under forward charge and have not reverted to reverse charge mechanism.
A GTA that has opted for forward charge but omits the declaration from an invoice leaves the recipient unable to rely on the proviso.
What is exempt
Notification No. 12/2017-Central Tax (Rate) has three GTA entries.
- Entry 21 exempts transport in a goods carriage of agricultural produce; milk, salt and food grain including flour, pulses and rice; organic manure; registered newspapers and magazines; relief materials for disaster victims; and defence or military equipment. Clauses (b) and © were omitted by Notification No. 04/2022 from 18 July 2022. They had exempted a consignment in a single carriage up to Rs 1,500, and all goods for a single consignee up to Rs 750. Small consignments are now taxable.
- Entry 21A exempts GTA services “to an unregistered person, including an unregistered casual taxable person”, other than the factories, societies, co-operatives, bodies corporate, partnership firms and casual taxable persons listed in it.
- Entry 21B exempts GTA services to government departments, local authorities and governmental agencies registered only for TDS.
What each side does
The GTA under reverse charge issues a consignment note and a tax invoice stating that tax is payable by the recipient. It takes no credit on inputs used for those supplies. Notification No. 5/2017-Central Tax, issued under section 23(2), exempts from registration persons “only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient”. Its only amendment, by Notification No. 24/2024-Central Tax, concerns metal scrap. A GTA all of whose taxable supplies go to recipients liable under serial number 1 therefore falls within it. A GTA that opts for forward charge needs registration: Annexure V is made by one who has “taken registration/have applied for registration”, and the proviso to serial number 1 applies only where the supplier “has taken registration”. Rule 54(3) requires its tax invoice “or any other document in lieu thereof” to carry the gross weight of the consignment, consigner and consignee, the vehicle number, the goods, origin and destination, and the GSTIN of “the person liable for paying tax whether as consigner, consignee or goods transport agency”. GTAs are among the classes exempt from e-invoicing (E-Invoicing: Who Must, and for Which Documents).
The GTA under forward charge files Annexure V in time, charges 5 or 18 per cent, puts the Annexure III declaration on the invoice, and reports the supply as an ordinary outward supply in GSTR-1 and GSTR-3B. At 5 per cent it takes no credit on inputs for those supplies. At 18 per cent it takes credit in the normal way.
The recipient under reverse charge pays the 5 per cent in cash, since section 49(4) does not let credit be used for reverse-charge tax. It reports the tax in GSTR-3B table 3.1(d). The time of supply is fixed by section 13. Credit of the tax paid is then available in table 4(A)(3) under the normal conditions, which are explained in Reporting Credit in GSTR-3B.
What to have ready
| Item | Where it comes from |
|---|---|
| Consignment notes and freight invoices | GTA |
| The GTA’s Annexure V (or Annexure VI) acknowledgment for the year | Portal, or jurisdictional officer |
| Whether each invoice carries the Annexure III declaration | Invoice |
| The recipient’s status: factory, company, firm, registered person, or unregistered | Recipient’s registration and constitution |
| The nature of the goods carried, for entry 21 | Consignment note, e-way bill |
Consequences, and what can be put right
A recipient that should have paid under reverse charge and did not owes the tax with interest under section 50. The demand is under section 73 or section 74 up to 2023-24, and section 74A from 2024-25. Paying it later restores credit only within the time allowed by section 16(4). A GTA that charges forward-charge tax without a valid Annexure V on record has charged tax on the wrong basis. The recipient’s liability under serial number 1 is not displaced, because the proviso requires the option to have been exercised. A missed window cannot be cured by filing late: the option for that year is lost, and the GTA stays on, or returns to, reverse charge until the next window. A GTA under forward charge at 5 per cent that takes credit breaks the condition of the rate. Shortfalls may be paid voluntarily before a notice (Before a Notice: DRC-01A and Paying Voluntarily).
The steps, in order
- Confirm that the transporter issues a consignment note and is therefore a GTA, and is not an e-commerce local-delivery platform.
- Check entries 21, 21A and 21B of Notification 12/2017 for an exemption.
- Find out whether the GTA has a valid Annexure V on record for the year and has not reverted by Annexure VI.
- If it has, and the invoice carries the Annexure III declaration, the GTA charges 5 per cent (no credit) or 18 per cent (with credit) and pays the tax.
- If not, and the recipient is in the list in serial number 1 of Notification 13/2017, the recipient pays 5 per cent under reverse charge, in cash, and may take credit of it.
- A GTA wanting to change route files Annexure V or VI between 1 January and 31 March, for the following year.
The next guide in this set, Selling Through E-Commerce Platforms, turns to sellers who reach buyers through online platforms.