GTA services, freight charges, multimodal transport, reverse charge mechanism — GST in transport is complex. This guide covers every rate, every exemption, and every compliance requirement for logistics businesses in 2026.
Transport and logistics businesses face a unique set of GST challenges that most other industries do not. The same company can simultaneously be providing services at 0% (exempt transport), 5% (GTA without ITC), and 18% (courier services, packaging) depending on the nature of each consignment. On top of that, reverse charge mechanism (RCM) means that in many cases the recipient — not the transporter — is responsible for paying the GST.
Add the mandatory e-way bill requirement for goods movement above Rs 50,000, and you have a compliance framework that requires careful attention to billing, documentation, and return filing.
We will cover everything in this guide: Goods Transport Agency (GTA) rates and the forward charge vs reverse charge choice, freight charges, courier services, multimodal transport, the Rs 50,000 e-way bill threshold, RCM applicability, and which categories are fully exempt. Use our e-way bill tool to generate e-way bills and our GST calculator to verify freight charges on any consignment.
Goods Transport Agencies can choose their rate at the beginning of each financial year. After GST 2.0 reform, the rate options have changed.
| Feature | Option | GST Rate | ITC Availability | Who Pays GST | Best For |
|---|---|---|---|---|---|
| GTA Forward Charge — Option A | 5% | No ITC for GTA | GTA pays (forward charge) | GTAs with low input costs, simpler filing preferred | |
| GTA Forward Charge — Option B | 18% | Full ITC available | GTA pays (forward charge) | GTAs with high vehicle, fuel, and maintenance costs | |
| GTA Reverse Charge | 5% (effectively) | No ITC for GTA | Recipient pays under RCM | When supplying to registered businesses who handle RCM themselves |
A Goods Transport Agency (GTA) is any person who provides road transport services for goods and issues a consignment note. The consignment note is the critical document — it is what distinguishes a GTA from a private truck owner just moving goods without formal documentation.
After GST 2.0 reform (effective September 2025): The previous 12% GTA rate with ITC has been revised upward to 18% to align with the elimination of the 12% slab. GTAs now have two forward charge options: 5% without ITC, or 18% with full ITC. This mirrors the pre-2.0 structure of 5% (no ITC) and 12% (with ITC), but the ITC option has moved to 18%.
The annual election: GTAs must choose their rate option at the beginning of each financial year by filing a declaration. If you are a GTA, you cannot switch mid-year. The choice between 5% and 18% follows the same logic as the restaurant ITC calculation — compare your net GST liability under both options given your fuel costs, vehicle EMIs, tyre replacements, and other GST-bearing inputs.
Practical example: A GTA with Rs 50 lakh monthly freight revenue and Rs 20 lakh monthly GST-bearing inputs (fuel, maintenance, tyres):
Under 5% (no ITC): GST liability = 5% of Rs 50 lakh = Rs 2,50,000
Under 18% (with ITC): GST collected = 18% of Rs 50 lakh = Rs 9,00,000. ITC on inputs = 18% of Rs 20 lakh = Rs 3,60,000. Net GST liability = Rs 9,00,000 - Rs 3,60,000 = Rs 5,40,000.
In this example, 5% wins. The 18% option would only win if your input costs with embedded GST exceeded roughly 72% of your freight revenue — which is unusual for most GTAs. However, if you have recent vehicle purchases with large GST on the EMI or have purchased a fleet, the ITC benefit in that year could flip the equation.
Issue consignment notes on every shipment and maintain a copy with the e-way bill. Our e-way bill tool helps you generate e-way bills linked to your consignment documentation.
RCM in transport is one of the most frequently confused compliance areas. Under Section 9(3) of the CGST Act, certain specified supplies attract reverse charge — meaning the recipient (not the supplier) must pay the GST directly to the government.
When does RCM apply to GTA services? RCM applies when a GTA (not opting for forward charge) provides services to specified recipients:
If you are a registered company (body corporate) paying freight to a GTA transporter who has not opted for forward charge, you are responsible for paying 5% GST on that freight under RCM. You must issue a self-invoice, pay the RCM GST in cash (cannot use ITC to pay RCM), and then claim ITC on the RCM GST paid in the same return period.
RCM does NOT apply when: The GTA has opted for forward charge (they will charge you 5% or 18% on their invoice). Unregistered transporters moving goods for private individuals. Transport via rail, air, or water (different rules apply).
The self-invoice for RCM: Under Section 31(3)(f) of the CGST Act, when you pay under RCM to an unregistered or non-forward-charge GTA, you must issue a self-invoice. This self-invoice is filed in GSTR-1 as an inward supply attracting RCM. The corresponding ITC can then be claimed in GSTR-3B. In myBillPlease, you can generate RCM self-invoices for transport payments — the system auto-calculates the 5% RCM GST and tracks it separately from your regular invoices.
The e-way bill is an electronic document generated on the e-way bill portal (ewaybillgst.gov.in) for movement of goods worth more than Rs 50,000. It is mandatory for both inter-state and intra-state movement of goods (intra-state e-way bill requirements vary by state, but most states have adopted them).
Who generates it? The consignor (seller), consignee (buyer), or the transporter can generate the e-way bill. In practice, most businesses generate it before dispatch and share the e-way bill number with the transporter.
What it must contain: GSTIN of supplier and recipient, place of dispatch and delivery, HSN code of goods, value of goods (must exceed Rs 50,000 for generation to be required), vehicle number, and transporter details.
Validity: For distances up to 200 km — 1 day. For every additional 200 km — 1 additional day. So a consignment traveling 800 km has 4 days of validity. E-way bills can be extended before expiry if the consignment is delayed due to accidents, natural calamity, or other reasons.
When is e-way bill NOT required? Goods exempt from e-way bill include: goods transported by non-motorized conveyance, fresh vegetables and fruits, milk and curd, books and newspapers, defense equipment under Ministry of Defence, and goods moved within customs bonded areas. Check the state-specific e-way bill exemption list for intra-state movement as each state has its own notification.
Use our e-way bill generator to create, update, and cancel e-way bills directly from your shipment data — no separate portal login needed.
These transport services attract 0% GST — no need to charge or collect GST on these
Beyond road transport via GTA, each mode of transport has its own GST rate structure:
Rail transport: Indian Railways is outside GST for most passenger services. Freight transport by railways (both Indian Railways and private rail operators) attracts 5% GST under SAC 9965. No ITC is available to the railway service provider on this. For businesses receiving railway freight services, RCM does not apply — Indian Railways and private rail operators charge GST directly on their bills.
Air freight: Air transport of goods (air cargo) attracts 18% GST under SAC 9965. This applies to domestic air freight. International air freight for exports is zero-rated. Air passenger transport is at 5% for economy class and 12% for business/first class.
Sea freight: Inland waterways transport of goods attracts 5% GST. Ocean freight on imported goods — this was previously subject to RCM but has been a contentious area. Currently, ocean freight for CIF imports is treated differently; consult your customs broker for the latest position as this has seen Supreme Court intervention.
Courier services: Courier services (door-to-door delivery with tracking, operated by courier companies) attract 18% GST under SAC 9968. This is different from GTA — couriers like Delhivery, DTDC, Blue Dart, FedEx, and DHL issue invoices with 18% GST. No RCM applies to courier services.
Multimodal transport: When a single contract covers transport using multiple modes (road + rail, road + sea), the entire supply is treated as multimodal transport and attracts 12% GST under SAC 9965 (post-GST 2.0, verify if this has moved to 18%). The single consignment note covering the entire multimodal journey determines the applicable rate for the complete journey.
For businesses moving high volumes of goods, tracking all these rates across different carriers and modes is complex. Use myBillPlease to record all your freight invoices and RCM entries correctly, ensuring your GSTR-2B reconciliation and ITC claims are accurate every month.
myBillPlease handles GTA invoicing, RCM self-invoices, and e-way bill generation. Stop juggling multiple portals for transport compliance.
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