Because any issue with transportation interrupts the entire business channel, transportation is a crucial component of the economy. This is why any change in the price of gasoline has a significant impact on business interruption. Read to know more about GST laws and freight charges HSN code for goods transport agency.
In India, vehicle transportation is the most common method of moving products. According to the National Highways Authority of India, highways carry around 65% of freight HSN code and 80% of passenger traffic. A transporter or courier company handles the road transportation of products. According to Notification No. 11/2017-Central Tax (Rate) issued 28 June 2017, ‘goods transport agency’ or GTA refers to any individual who offers services in connection with the transportation of goods by road and releases consignment notes, regardless of the name used.
This indicates that while other parties may also lease cars for the transportation of goods, only those that issue consignment notes are regarded as Goods transport agencies. A consignment note is thus a need for something to be called a Goods transport agency.
What Kind of Transportation Service Is Excluded from the GST?
Services involved in the movement of commodities are exempt except for the services of a courier agency by inland waterways; and a products transportation agency by road.
As a result, even under the GST system, road freight transportation services remain exempt. Only goods transport agencies are subject to GST.
Check Here To More About:https://services.gst.gov.in/services/searchhsnsac
Services Accounting Code (SAC)
The Central Board of Excise and Customs (CBEC) created the Services Accounting Code (SAC) to identify each service. A code of eight digits is assigned for each of the categorized services. There are currently more than 120 categorized services. For services to be classified using this coding system, SAC codes have been expanded under the GST regime to classify services using this coding system. Therefore, even from the perspective of GST, SAC is still crucial.
What Does Freight Charges Include?
Generally speaking, freight expenses cover the price of moving items from one place to another.
- Transportation costs
- Managing fees
- Traveler’s insurance
Excluding Freight Charges
1. Customs charges
2. Levies
3. Charges at the location
Goods Transportation vs Freight
The terms ‘Freight’ and ‘Goods Transportation Services’ both refer to the process of moving items, but they emphasise different aspects:
- Freight: This term broadly refers to the commercial activity of transporting cargo or merchandise from one location to another
- Goods Transportation Services: This phrase focuses on the specific services involved in the transportation process, emphasising the organised and systematic handling of various goods.
Wondering how to calculate GST percentage? Use our online GST calculator India for accurate results.
Type of Transportation Considered as Freight (As Per GST)
Freight pertains to the transportation of goods, cargo, or merchandise in large quantities from one location to another, using various modes of transportation such as ships, airplanes, trucks, trains, and other means. A GST registration is crucial for businesses engaged in the freight industry. This registration allows them to charge GST on their services where applicable and ensures they comply with the tax regulations governing the transport sector. Proper GST compliance through registration helps streamline the tax process and allows for the accurate collection and remittance of taxes on transportation services.
Types of Transportation
Land Transportation
- General Goods Transport Services (excluding consumables)
- Road Transport Services
- Railway Transport Services
- Other Land Transport Services for Goods (N.E.C. – Not Elsewhere Classified)
Water Transportation
- Coastal and transoceanic transportation facilitated by vessels like bulk cargo vessels, refrigerator vessels, container ships, and tankers
- Inland waterway transportation uses vessels such as tankers, refrigerator vessels, and other watercraft.
- Pipeline Transportation: Transport Services for Natural Gas, Petroleum, Sewerage, and Water via pipelines
- Air Transportation: Air Transport Services for Parcels, Letters, and other Goods
- Space Transportation: Space Transport Services for Freight
- Freight Handling: Includes activities such as Freight Inward, Freight Outward, Freight Forwarding, Shipping, and Cargo Charges.
Goods Transport Services GST Rates 9965 SAC Code
Products and Services Accounting Code (SAC) are listed below. You can determine the GST tax that applies to your services. You can check the six-digit code and service information.
| SAC | Description | Percentage |
| 9965 |
Rail transportation of cargo (apart from the services listed under item no. Condition: As long as the input tax credit for products used to provide the service is not applied to the payment of central taxes or integrated taxes on the provision of the service. |
CGST @ 2.5% SGST @ 2.5% IGST @ 5% |
| 9965 |
Shipboard cargo transportation. Condition: As long as no credit for input tax paid on items (except ships, bulk carriers, and tankers) utilized in providing the service has been claimed. |
CGST @ 2.5% SGST @ 2.5% IGST @ 5% |
| 9965 |
Regarding the transportation of products, the services of the goods transport agency (GTA). Explanation. Any individual who offers services related to the transportation of goods by road, as well as issues consignment notes, is considered a “goods transport agency.” Providing that no credit has been taken for input tax paid on the products and services used to provide the service. |
CGST – 2.5% SGST – 2.5% IGST – 5% |
|
|
Regarding the transportation of products, the services of the Goods Transport Agency (GTA) Condition: Provided that from this point forward, the goods transport agency that chooses to pay central tax @ 6% under this article will be required to pay central tax @ 6% on any GTA services that it supplies. |
CGST – 6% SGST – 6% IGST – 12% |
| 9965 | A person is other than the Indian Railways transporting products in containers by train. |
CGST – 6% SGST – 6% IGST – 12% |
| 9965 |
Pipeline transportation of natural gas, crude oil, motor spirit (also known as gasoline), high-speed diesel, or aviation turbine fuel Providing that no credit has been taken for input tax paid on the products and services used to provide the service. |
CGST – 2.5% SGST – 2.5% IGST – 5% |
| 9965 |
Conveyance of products using many modes. Explanation. – (a) “Multimodal transportation” refers to the act of a multimodal transporter carrying goods using at least two different modes of transportation from the point of acceptance to the point of delivery; (b) “mode of transport” refers to the movement of goods by land, air, sea, or inland waterways; and (c) “multimodal transporter” refers to a person who – (a) signs a contract under which he agrees to perform multimodal transport services against freight and (b) acts as principal |
CGST – 6% SGST – 6% IGST – 12% |
| 9965 | Goods Transport services other than the above. |
CGST – 9% SGST – 9% IGST – 18% |
| 9965 | Services for moving goods include: (a) road transportation, excluding the services of (i) goods transportation services; (ii) a courier agency; and (b) inland waterways. |
CGST – Nil SGST – Nil IGST – Nil |
| 9965 | Services that involve flying products from a location outside of India to a customs clearing post inside of India. |
CGST – Nil SGST – Nil IGST – Nil |
| 9965 |
Services involving the air delivery of products from a customs clearing station in India to a location outside of India. Condition: After September 30, 2020, nothing in this serial number shall be applicable. |
CGST – Nil SGST – Nil IGST – Nil |
| 9965 |
Services for shipping products from an Indian customs station for clearance to a location outside of India. Condition: After September 30, 2020, nothing in this serial number shall be applicable. |
CGST – Nil SGST – Nil IGST – Nil |
| 9965 |
Transportation services by rail or vessel of the following goods from one location in India to another: (a) Relief supplies for victims of calamities, accidents, or mishaps, whether natural or caused by human activity; (b) Defence or military equipment; (c) Newspapers or magazines registered with the Newspapers; (d) Railroad equipment or materials; (e) Agricultural products; (f) Milk, salt, and food grains, including flour, pulses, and rice; and (g) Organs. |
CGST – Nil SGST – Nil IGST – Nil |
| 9965 |
Providing services through the transportation of products in a goods carriage, (a) Agricultural products; (b) Goods, where the consideration charged for the shipment of merchandise on a consignment shipped in a single carriage, does not exceed ₹1,500; (c) Goods, where the consideration charged for the commuting of all such goods for a single consignee, does not exceed ₹750; (d) Milk, food grains, and salt including flour, pulses, and rice; (e) organic Manure; and (f) Newspapers as well as magazines registered with the relevant regulatory body. |
CGST – Nil SGST – Nil IGST – Nil |
FAQs
1. What is 9965 SAC code under GST?
SAC Code 9965 relates to the services provided by Goods Transport Agencies (GTAs) involved in the conveyance of goods. This code encompasses the transportation of diverse items, inclusive of used household goods meant for personal use. GTAs are organizations involved in road transport and issue consignment notes.
2. What is the GST rate for freight charges under HSN code 9965?
The GST rate for freight charges under HSN code 9965 is 12 percent, it's essential to verify this information with the latest GST rate schedule or consult with a tax professional as rates may have changed after my last update.
3. What is the HSN code for a goods transport agency?
The Goods Transport Services fall under the HSN code 9965, a crucial identifier used for the classification of goods and services in the Harmonized System Nomenclature. This distinct code is instrumental in categorizing products and services for taxation and trade-related purposes.
4. What is the difference between SAC 9965 and 9967?
SAC 9965 covers services provided by a goods transport agency, while SAC 9967 relates to services provided by a courier agency. The key difference lies like the services offered, with 9965 focusing on goods transport and 9967 on courier services. Changes have been incorporated in CGST Notification (Rate) to eliminate confusion regarding the classification of GTA Service under either HSN 9965 or 9967. The revised classification specifies that GTA services will now be categorised solely under SAC 9965, while 'Support services in transport' will be classified under SAC 9967
5. What is Freight HSN code 996511 8 digit?
The 8-digit HSN code 996511 represents specific services related to the transport of goods by road, commonly known as goods transport services. It is essential for accurate classification and identification within the GST framework.
