GST on transportation services in India depends on one thing more than anything else: how the service is classified. Many businesses pay freight every week, but still get confused about GST because road transport is often exempt, while GTA and courier are taxable, and RCM vs FCM decides who pays the tax.
This guide explains GST on transportation in a practical way—with clear headings, real examples, and invoice-ready checkpoints you can apply immediately.
GST on Transportation Services: Quick Overview (2026)
Before going into details, use this section to quickly identify which GST rule applies to your freight.
Fast GST Rate Snapshot (Common Cases)
| Transportation service | GST impact | What it means |
|---|---|---|
| Goods transport by road (not GTA / not courier) | Nil (Exempt) | No GST is charged on freight |
| Goods transport by road by GTA | Taxable | GST is applicable under GTA rules |
| Courier services | Taxable | Not covered under road transport exemption |
| Rail / vessel / air / multimodal | Rate varies | Depends on service type and conditions |
Key Terms You Must Know (GTA, Consignment Note, RCM, FCM)
What is a GTA in GST?
A transporter becomes a Goods Transport Agency (GTA) when they transport goods by road and issue a consignment note.
What is a consignment note (simple meaning)?
It is a transport document issued by the transporter that confirms they have accepted goods for transport and includes shipment details.
If a consignment note is issued → GTA rules apply.
What is RCM?
RCM means Reverse Charge Mechanism—the recipient pays GST, not the transporter.
What is FCM?
FCM means Forward Charge Mechanism—the transporter charges GST on invoice, and you pay it to them.
GST on Goods Transport by Road (Most Common Case)
Most freight in India moves by road, so this section matters the most for businesses.
Non-GTA Road Transport (Exempt / Nil GST)
If a transporter is not a GTA (no consignment note issued) and is not a courier, then transport of goods by road is exempt.
Typical real-life examples
- Local truck hired for shifting materials
- One-time trip arranged directly with a truck owner
- Transporter provides only basic trip details without consignment note
GTA Road Transport (Taxable Freight)
When a transporter issues a consignment note, the service becomes GTA and GST applies.
GTA rates used in real billing
- 5% (without ITC) in many standard cases
- 18% (with ITC option) (updated from earlier 12% option in recent changes)
GTA Exemptions You Should Know (Very Important)
Even if it is GTA, some consignments are exempt, such as:
- Freight per carriage up to ₹1,500
- Freight per consignee up to ₹750
- Transport of agricultural produce and certain essential items (as per exemption list)
These exemptions are extremely useful for small consignments and frequent local dispatches.
RCM vs FCM on GTA Freight
This is where most accounting confusion happens.
When RCM Applies (Recipient Pays GST)
RCM generally applies when the recipient is in certain categories, such as:
- factory
- company/body corporate
- partnership firm/LLP
- GST registered person
- society/co-operative society
Practical meaning:
If your business is GST-registered or a company/firm, many GTA bills will fall under RCM, and you may have to pay GST in your returns.
When FCM Applies (Transporter Charges GST)
FCM applies when the GTA opts to pay tax itself and charges GST in the invoice.
Practical meaning:
If the transporter invoice has GST charged, it is typically FCM.
GST Rates for Other Transportation Modes
Not every transport service is road freight. Use this section for other modes.
GST on Courier Services
Courier services are taxable and are not covered under the road transport exemption.
Common use cases
- parcels, documents, small packages with door delivery
GST on Rail Freight
Rail freight is taxable under relevant service entries and can also have exemptions for specified goods.
GST on Vessel / Coastal Shipping
Vessel transport has its own GST entry and conditions, with exemptions for selected scenarios and goods.
GST on Air Freight (Import Leg)
Certain air freight services linked to import clearance have exemption coverage (as per exemption entries).
GST on Multimodal Transportation
Multimodal transport (road + rail + vessel, etc.) depends on whether the service includes air leg and what option is chosen. This is common for contract logistics and large distribution networks.
Truck Rental vs Transportation Service (Do Not Mix These)
Many people search “truck rental GST” and apply the same rule as freight—this creates mistakes.
When it is a Transportation (Freight) service
- You are paying for movement of goods from A to B
- Freight is the primary service
When it is Truck Rental / Vehicle Hiring
- You are hiring the vehicle for time/route
- Often closer to “renting of goods carriage with operator”
- GST treatment can differ from pure freight
Tip: Your invoice wording should clearly match what you actually provide—freight vs rental.
Checklist Before Confirming Any Freight
- Is it GTA or non-GTA (consignment note yes/no)?
- If GTA, will it be RCM or FCM?
- Which rate option is used (5% or 18%)?
- Do GTA exemptions apply (₹750/₹1,500/agri)?
- Is this freight or truck rental service?
FAQs
Is GST applicable on transportation of goods by road?
Usually no, road transport is exempt unless it is GTA or courier.
What is the GST rate for GTA freight in India?
GTA freight is taxable and commonly billed at 5% (without ITC) or 18% (with ITC option).
How do I know if a transporter is a GTA?
If they issue a consignment note, they are treated as GTA.
When does RCM apply on GTA freight?
RCM often applies when the recipient is a company/firm/GST-registered person.
Are small consignments exempt under GTA?
Yes, freight under ₹750 per consignee or ₹1,500 per carriage can be exempt (subject to conditions).
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