1. What is GTA under GST?
GTA means Goods Transport Agency. As per the GST Act, a GTA is any person or company that issues a consignment note for carrying goods by road. In simple words: if you are a transporter and you give a bilty/consignment note, then you are treated as GTA under GST. If no bilty is given (like small tempo or local van services), then it is not GTA.
2. GST Rates Before 22nd September 2025
| Service | GST Rate |
| GTA | 5% (FCM/RCM) without ITC, 12% with ITC |
| Goods Transport by Rail Container (Non-Railway) | 12% with ITC |
| Multimodal Transport | 12% with ITC |
3. GST Rates After 22nd September 2025
| Service | GST Rate |
| GTA | 5% (FCM/RCM) without ITC (no change), 18% with ITC |
| Goods Transport by Rail Container (Non-Railway) | 5% without ITC, 18% with ITC |
| Multimodal Transport | 5% with limited ITC, 18% with full ITC |
4. Common Confusion – Quick Commerce Deliveries
Services like Flipkart, Instamart, Zepto are not GTA because they do not issue consignment notes. GST rate for such delivery services is 18% with ITC, not 5%.
5. Cash Flow Impact on the Industry
Example – Truck Purchase
| Particulars | Earlier (28% GST) | Now (18% GST) |
| Truck Basic Price | ₹35,00,000 | ₹35,00,000 |
| GST Amount | ₹10,00,000 | ₹6,30,000 |
| Total Cost (with GST) | ₹45,00,000 | ₹41,30,000 |
| Benefit per Truck | – | ₹3,70,000 |
Impact on GST Recovery (Working Capital)
| Scenario | GST Paid on Truck | Sale Needed to Recover GST |
| Earlier (12% GTA with ITC) | ₹10,00,000 | ₹83,33,333 |
| Now (18% GTA with ITC) | ₹6,30,000 | ₹35,00,000 |
Money comes back 2.5 times faster now. This means less money is blocked in GST and transporters have better cash flow.
6. Key Observations
1. Lower Truck Cost: Transporters save almost ₹3.7 lakh per truck.
2. Faster Credit Recovery: GST paid on trucks can be recovered much quicker.
3. Choice for Transporters: Small players may use 5% option, large fleet owners benefit from 18% ITC.
4. Better Cash Flow: Less money blocked, more liquidity in business.
7. Recommendations for Transporters
– Small Fleet Owners: Use 5% GTA option (under RCM/FCM) to keep compliance simple.
– Large Fleet Owners: Shift to 18% with ITC option to claim credit on trucks, tyres, spare parts, insurance, etc.
– Plan Purchases: Trucks and capital goods are now cheaper due to GST reduction.
– Stay Compliant: Always issue a consignment note to be treated as GTA.
8. Conclusion
The GST changes from 22nd September 2025 are beneficial for the GTA industry. Small players can still use the 5% scheme, while larger transporters enjoy reduced cost of trucks, faster ITC recovery, and stronger cash flow under the 18% with ITC option. Transporters should choose wisely based on their size and input expenses.
