Goods Transport Agency (GTA) RCM
Goods Transport Agency (GTA) RCM is the GST reverse-charge rule under which the business receiving road transport of goods — not the transporter — pays GST at 5% on the freight. It appears in the books as a self-assessed GST liability with a matching input credit. It matters because a registered recipient must raise and pay this tax itself, and missing it creates an unrecorded GST liability.
What Is Goods Transport Agency (GTA) RCM?
A Goods Transport Agency issues a consignment note and moves goods by road. Under the reverse-charge mechanism, when a GTA provides service to specified recipients — companies, firms, registered persons — the liability to pay GST shifts from the transporter to the recipient. The recipient pays GST on the freight at 5% under RCM and, subject to the usual rules, claims it back as input credit.
An Indian manufacturer, trader or logistics user meets GTA RCM on almost every inward and outward freight bill from an unregistered-for-forward-charge transporter. The accounts team must self-invoice, compute GST at 5% on the freight, pay it in cash (not by setting off credit), and then claim the input credit. The GTA itself can instead opt to pay under forward charge — at 12% with input credit or 5% without — by filing Annexure V before the year begins; absent that, RCM applies and the recipient carries the liability.
Key terms
- Trip-Wise Profit and Loss Statement — A per-trip profitability report used by transport operators.
- Fuel Fleet Card Reconciliation — Matching fleet fuel-card spend to the ledger.
- STPI / SOFTEX Export Filing — A software-export filing, unrelated to transport GST.
How Goods Transport Agency (GTA) RCM Works
Freight tax moves from consignment note to input credit through a set path:
- 1Receive the GTA service
The GTA transports goods and issues a consignment note — the source document confirming a GTA service.
- 2Check the charge mechanism
The accounts team confirms whether the GTA has opted for forward charge (Annexure V) or the default RCM applies.
- 3Self-invoice under RCM
Where RCM applies, the recipient raises a self-invoice and computes GST at 5% on the freight value.
- 4Pay GST in cash
The RCM liability is paid in cash through the electronic cash ledger — it cannot be set off against input credit.
- 5Claim the input credit
Subject to eligibility, the recipient claims the RCM tax paid as input credit in the same or a later period.
Where Goods Transport Agency (GTA) RCM Applies — Travel and Logistics Operators
GTA RCM touches almost every business that moves goods by road:
- Manufacturers and traders — Businesses receiving inward or outward road freight from a GTA carry the RCM liability.
- Distributors and warehouses — Firms moving stock between locations by GTA must self-assess GST on freight.
- Logistics aggregators — Operators booking third-party trucking need to track which legs attract RCM.
- E-commerce fulfilment — Sellers using GTA transport for dispatches account for RCM on the freight.
- Recipients versus forward-charge GTAs — Where a GTA has filed Annexure V for forward charge, the recipient does not pay RCM — so the transporter's status must be checked.
See also: Travel & Logistics Accounting Trading Business Accounting Services
Statutory Position on Goods Transport Agency (GTA) RCM
Under Notification No. 13/2017 – Central Tax (Rate), GST on GTA services to specified recipients (including companies, partnership firms and registered persons) is payable by the recipient under reverse charge at 5% (2.5% CGST + 2.5% SGST, or 5% IGST) on the freight, without the transporter passing on input credit. The recipient pays the RCM tax in cash and may then claim input credit subject to eligibility. Alternatively, a GTA may opt to pay under forward charge — 12% with full input credit or 5% without — by filing Annexure V before the start of the financial year; if it does not, RCM applies by default.
- RCM rate — 5% on freight (2.5% CGST + 2.5% SGST or 5% IGST), paid by the recipient. Law stated as at 22 July 2026.
- Legal basis — Notification No. 13/2017 – Central Tax (Rate) under the CGST Act 2017.
- Payment — RCM liability paid in cash; input credit claimed separately, subject to eligibility.
- Forward-charge option — GTA may charge 12% (with ITC) or 5% (without) by filing Annexure V before the year begins.
Goods Transport Agency (GTA) RCM: A Practical Example
| Particulars | Amount (INR) | Treatment |
|---|---|---|
| Freight charged by GTA (RCM applies) | 2,00,000 | Consignment note received |
| GST under RCM at 5% | 10,000 | Self-invoiced by recipient |
| Paid in cash via cash ledger | 10,000 | Cannot be set off against ITC |
| Input credit claimed | 10,000 | Subject to eligibility |
| Net GST cost | 0 | If fully creditable |
A Nagpur steel trader pays ₹2,00,000 of freight to a GTA that has not opted for forward charge, so RCM applies. The trader self-invoices, computes GST at 5% — ₹10,000 — and pays it in cash through the electronic cash ledger, as RCM cannot be met from input credit. It then claims the ₹10,000 back as input credit. If it forgets the self-invoice, it carries an unrecorded GST liability that surfaces, with interest, at the next audit.
Not self-invoicing: Ignoring RCM on GTA freight leaves an unrecorded GST liability → self-invoice and pay RCM on every applicable freight bill.
Common Mistakes With Goods Transport Agency (GTA) RCM
GTA RCM errors usually mean an unrecorded liability or a lost credit:
- Not self-invoicing — Ignoring RCM on GTA freight leaves an unrecorded GST liability → self-invoice and pay RCM on every applicable freight bill.
- Paying RCM from input credit — Setting off the RCM liability against ITC is not allowed → pay RCM in cash, then claim credit separately.
- Missing the forward-charge status — Paying RCM when the GTA has opted for forward charge double-pays → check whether the GTA filed Annexure V.
- Wrong rate — Applying 12% under RCM instead of 5% overstates the liability → RCM on GTA is 5%; 12% is only under the GTA's forward-charge option.
- Not claiming the credit — Paying RCM but forgetting the input credit inflates cost → claim the eligible credit in the return.
Goods Transport Agency (GTA) RCM is the GST reverse-charge rule under which the business receiving road transport of goods — not the transporter — pays GST at 5% on the freight. It appears in the books as a self-assessed GST liability with a matching input credit. It matters because a registered recipient must raise and pay this tax itself, and missing it creates an unrecorded GST liability.
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Applicable framework: CGST Act 2017; Notification No. 13/2017 – Central Tax (Rate); Annexure V forward-charge option. For general information only, not professional advice. Verify the current position for your entity before acting.