GST on Transportation of Goods: Rates, Who Pays and Exemptions

GST for Goods Transport Services

GST on transportation of goods by road is charged at 5% when a goods transport agency (GTA) does not take input tax credit, or 18% when the GTA opts to charge GST and claim full input tax credit. These rates apply from 22 September 2025, when the 18% option replaced the earlier 12% option. Transport by a truck owner who is not a GTA is exempt, and so is GTA transport of certain essential goods.

This guide covers GST on goods transport services in one place: the transport GST rate for each type of service, how GST on transportation of goods by road depends on whether the transporter is a GTA, who pays GST on transport services under reverse charge and forward charge, the input tax credit effect of 5% and 18%, the exemptions that still apply, and a worked example of one freight bill.

Transport GST rate from 22 September 2025

The transport GST rate depends on who provides the service and how it is provided. The table lists the rates for goods transport services that a shipper is most likely to meet. The percentages are total GST: for a supply within one state they are split equally into CGST and SGST, and for a supply between states the full rate is charged as IGST.

GST Rates for Transportation Services

Service	GST Rate	Input Tax Credit	Who Pays
Road transport by a goods transport agency (GTA)	5%	No input tax credit for the GTA	Either the recipient pays under reverse charge or the GTA pays under forward charge
Road transport by a GTA that opts for the higher rate	18%	Full input tax credit	The GTA charges GST on its invoice (forward charge)
Road transport by a person who is not a GTA (no consignment note issued)	Exempt	Not applicable	No GST on the freight
Hiring a truck or other goods carriage to a GTA	Exempt	Not applicable	No GST on the hire charge
Renting a goods carriage with operator, fuel included	5% or 18%	5%: restricted credit. 18%: full credit	The supplier charges GST
Multimodal transport with no air leg	5%	Restricted credit	The multimodal transporter charges GST
Multimodal transport that includes air	18%	Full input tax credit	The multimodal transporter charges GST
Containers by rail by a container train operator	5% or 18%	5%: no credit. 18%: full credit	The operator charges GST

Other modes, such as goods carried by Indian Railways, by air within India or by inland waterways, have their own entries in the rate notifications. Check the current notification for the mode you use before you invoice.

GST on transportation of goods by road: GTA or not

GST on transportation of goods by road turns on one question: is the transporter a goods transport agency? The answer decides whether GST applies at all, and at which rate.

What makes a transporter a GTA

Under GST, a goods transport agency is a person who provides a service in relation to the transport of goods by road and issues a consignment note, by whatever name it is called. In road freight the consignment note is usually the lorry receipt (LR). The consignment note is the deciding document: a transporter that issues one is treated as a GTA for that service.

From 22 September 2025 the definition excludes e-commerce operators that provide, or through which others provide, local delivery services.

Transport by a truck owner who is not a GTA

Transportation of goods by road is exempt from GST when the service is not provided by a GTA or a courier agency. A truck owner who carries goods without issuing a consignment note therefore charges no GST on the freight. Courier services do not fall under this exemption.

Hiring or renting a truck

Hiring a truck or other goods carriage to a GTA is exempt. This lets a GTA hire vehicles from individual owners without that hire charge carrying GST. Renting a goods carriage with an operator to anyone else is taxed at 5% with restricted input tax credit, or at 18% with full input tax credit, where the rent includes the cost of fuel.

You may also like to read: A Guide to GST for Good Transportation Agency and Truck Owners

Who pays GST on transport services

GST on transport services provided by a GTA can be paid in two ways. Under reverse charge the recipient of the service pays the tax to the government. Under forward charge the GTA charges GST on its invoice and pays it itself.

Reverse charge: when the recipient pays

When a GTA charges 5% and has not opted to pay GST itself, the tax is paid under reverse charge by the recipient of the service, if the recipient is one of the following:

A factory registered under the Factories Act, 1948
A society registered under the Societies Registration Act, 1860
A co-operative society
A person registered under GST
A body corporate
A partnership firm, whether registered or not
A casual taxable person

Government departments and local authorities that are registered only to deduct tax at source are kept outside this reverse charge rule.

Forward charge: when the GTA pays

A GTA can choose to pay GST itself by filing a declaration in Annexure V between 1 January and 31 March of the financial year before the year it applies to. Once made, the choice continues for later years. To return to reverse charge, the GTA files Annexure VI in the same January to March window.

Under forward charge the GTA can charge 5% without input tax credit or 18% with full input tax credit. For the detailed registration, invoicing and return-filing steps a GTA follows, see the guide to GST for goods transport agencies and truck owners.

5% or 18%: what changes for input tax credit

The two rates trade a lower tax on the freight against the right to claim credit. At 5%, the GTA cannot take input tax credit on the goods and services it uses to provide the transport service, such as trucks, spare parts or repairs bought with GST. At 18%, the GTA charges more GST on the freight but can claim full credit for the GST it pays on those inputs.

Which option suits a GTA depends on how much GST it pays on its own costs and on its customers. For a business customer that can claim credit for the GST it is charged, the higher rate may make little difference to its final cost; a customer that cannot claim credit pays more. Whether the recipient can claim credit for GST it pays depends on its own use of the service, so confirm that with your tax adviser.

Goods transport that is exempt from GST

GTA services are exempt when they are supplied to an unregistered person, including an unregistered casual taxable person, other than a factory, a society, a co-operative society, a body corporate or a partnership firm. GTA services are also exempt when the goods carried in the goods carriage are:

Agricultural produce
Milk, salt and food grain, including flour, pulses and rice
Organic manure
Newspapers or magazines registered with the Registrar of Newspapers
Relief materials for victims of natural or man-made disasters, calamities, accidents or mishaps
Defence or military equipment

No longer exempt: freight up to Rs 1,500 or Rs 750

Until 17 July 2022, GTA freight of up to Rs 1,500 for a consignment carried in a single carriage, and up to Rs 750 for all goods carried for a single consignee, was exempt from GST. Both exemptions were removed with effect from 18 July 2022. Such freight is now taxed at the normal GTA rate unless the goods themselves are in the exempt list above.

Worked example: GST on one freight bill

A GTA carries goods by road for a manufacturer that is registered under GST, for a freight charge of Rs 50,000. The table shows the GST under each option the GTA can be under.

GTA GST Calculation Comparison

Item	GTA on 5%, Reverse Charge	GTA on 5%, Forward Charge	GTA on 18%, Forward Charge
Freight charged	Rs 50,000	Rs 50,000	Rs 50,000
GST rate	5%	5%	18%
Who pays the GST	The manufacturer, under reverse charge	The GTA, on its invoice	The GTA, on its invoice
GST amount	Rs 2,500	Rs 2,500	Rs 9,000
Total on the GTA invoice	Rs 50,000	Rs 52,500	Rs 59,000
Input tax credit for the GTA	No	No	Yes, full credit

The amounts follow directly from the rates. Which column applies depends on the option the GTA has chosen for the year, so the GTA and its customer should agree it before the first invoice.

Consignment note, invoice and e-way bill

A road consignment usually travels with the supplier’s tax invoice or delivery challan, the GTA’s consignment note and, where it applies, an e-way bill. The consignment note shows the transporter is acting as a GTA, which is what brings the GTA rates and the reverse charge rules into play. For when an e-way bill is needed, its validity and how Part B is updated, see e-way bill rules for road freight.

Freight terms also depend on the load. A full truckload and a part load are priced differently, which changes the freight value on which GST is calculated. See FTL shipping, LTL shipping and truck load capacity in India for how those loads work.

Conclusion

GST on transportation of goods comes down to three questions: is the transporter a GTA, which rate option has the GTA chosen, and is the recipient one of the businesses that pays under reverse charge. Since 22 September 2025, a GTA charges 5% without input tax credit or 18% with full credit, the old 12% option is gone, and the Rs 1,500 and Rs 750 freight exemptions no longer apply.

Sources

The rates and rules in this guide were checked on 6 October 2026 against these official sources and against the texts of Notification No. 12/2017-Central Tax (Rate) (exemptions) and Notification No. 15/2025-Central Tax (Rate) (rates and GTA definition from 22 September 2025). GST rates can change after that date, so confirm the current notification before invoicing.

FAQs

What is the GST rate on transportation of goods by road?

For a goods transport agency it is 5% without input tax credit, or 18% with full input tax credit if the GTA opts to charge it. Road transport by someone who is not a GTA and does not issue a consignment note is exempt.

Who pays GST on transport charges?

When a GTA charges 5% and has not opted for forward charge, GST is paid under reverse charge by the recipient if it is a factory, a registered society, a co-operative society, a GST-registered person, a body corporate, a partnership firm or a casual taxable person. When the GTA has opted for forward charge, the GTA charges GST on its invoice.

Is the 12% GST rate for GTA still available?

No. From 22 September 2025 the with-credit option for GTA services is 18%. The 5% rate without input tax credit continues.

Is freight below Rs 1,500 or Rs 750 still exempt from GST?

No. Those two GTA exemptions were removed with effect from 18 July 2022. The GTA exemptions that remain depend on the goods carried, such as agricultural produce, milk, salt, food grains, organic manure, registered newspapers, relief materials and defence equipment, or on the recipient, such as an unregistered individual.

How does a GTA choose to pay GST under forward charge?

By filing a declaration in Annexure V between 1 January and 31 March of the preceding financial year. The choice then continues for later years until the GTA files Annexure VI in the same window to return to reverse charge.

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Thanks For Reading: GST for Goods Transport Services: A Comprehensive Guide