A practical GST guide for companies earning from goods carriage vehicles — through fixed-period hiring to other companies or Porter-platform trips. Covers GTA vs non-GTA classification, SAC 9966/9965/9973 rates, RCM vs forward charge, and how to structure both revenue streams at 18% with full input tax credit.
Purpose
The company owns a goods carriage vehicle and earns revenue from it in two ways: hiring the vehicle out to another company for a fixed period, and providing transportation services to customers sourced through the Porter platform. This guide addresses the GST classification for each revenue stream, the applicable rates, and the recommended structuring to achieve 18% GST with full ITC.
Definition of Goods Transport Agency (GTA)
Under GST law — most recently restated in Notification No. 16/2025-Central Tax (Rate) dated 16 July 2025, amending the original definition in Notification No. 12/2017-Central Tax (Rate) — a Goods Transport Agency is defined as:
"Any person who provides service in relation to transport of goods by road and issues a consignment note, by whatever name called, but does not include an electronic commerce operator by whom, or through whom, the services of local delivery are provided."
Three elements decide classification:
- 1Transport of goods by road — not rail, air, or water.
- 2Issuance of a consignment note — a document (however titled) issued against receipt of goods that fixes liability for their safe delivery. This is the decisive test: no consignment note, no GTA status, regardless of what the service is called commercially.
- 3Exclusion for e-commerce local-delivery operators — platforms such as Flipkart Instamart or Zepto that arrange local delivery without issuing consignment notes fall outside the GTA definition and are taxed as ordinary service providers at 18% with full ITC.
A person who transports goods but does not issue a consignment note is not a GTA — they are taxed as an ordinary goods-transport service provider. That distinction is the hinge for the 18% strategy discussed below.
Service 1 — Hiring Out the Vehicle to a Company for a Period
Classification turns on whether the vehicle is supplied with or without the company's own driver/operator.
With operator (SAC 9966)
| Consideration structure | GST rate | ITC |
|---|---|---|
| Fuel cost billed separately / borne by hirer | 18% | Full ITC, forward charge |
| Fuel cost included in the rental charge | 12% | Full ITC, forward charge |
Without operator — bare vehicle (SAC 9973)
Treated as leasing of goods. The GST rate mirrors whatever rate applies to an outright sale of that vehicle class — not a flat 18% — and needs to be checked against the current HSN rate before invoicing.
Recommendation
To land on a clean 18%, structure the arrangement as "rental of goods carriage with operator," bill fuel separately (or have the hirer pay for fuel directly), and invoice under SAC 9966 at 18% with GST charged on the face of the invoice (forward charge). This also preserves full ITC for the company on inputs such as vehicle purchase, spares, maintenance, and insurance.
Worked example 1A — recommended structure
Company hires out one truck with driver to ABC Manufacturing Pvt Ltd for 3 months at Rs 1,00,000/month; ABC bears fuel cost directly.
| Line item | Amount (Rs) |
|---|---|
| Rental (per month) | 1,00,000 |
| GST @ 18% (SAC 9966) | 18,000 |
| Total invoice value | 1,18,000 |
ABC Manufacturing can claim the Rs 18,000/month as ITC. The company can claim ITC on truck maintenance, insurance and spares used to make this supply.
Worked example 1B — fuel included (for contrast)
Same facts, but the Rs 1,00,000 is inclusive of fuel.
| Line item | Amount (Rs) |
|---|---|
| Rental (per month, fuel included) | 1,00,000 |
| GST @ 12% (SAC 9966) | 12,000 |
| Total invoice value | 1,12,000 |
Service 2 — Transport Services to Customers via Porter
The consignment-note fork
- 1If the company (or its driver) issues a consignment note for a consignment, the company is legally a GTA for that trip, regardless of Porter's involvement. There is no 18% option once GTA status attaches.
- 2If no consignment note is issued — the trip is booked and executed as a straightforward point-to-point job through the Porter app, with a delivery/trip receipt but no document fixing liability for safe delivery — the company is a general transportation service provider, taxed under SAC 9965 ("goods transport services, other than GTA and courier services") at 18% with full ITC, forward charge.
GTA rate structure (if consignment notes are issued)
Effective from the 56th GST Council meeting (September 2025), the earlier 12% forward-charge slab for GTAs was withdrawn. GTA services now carry a single rate — 5%, with no ITC on the GTA's own inputs — applied one of two ways:
- 1Reverse charge (RCM): the specified recipient self-invoices and pays 5% GST directly, if the customer falls in the specified-recipient list — factories under the Factories Act 1948; societies registered under the Societies Registration Act or similar law; co-operative societies; any GST-registered person; body corporates; partnership firms/AOPs; and casual taxable persons. The company charges no GST on its own invoice.
- 2Forward charge (FCM): the company itself charges and remits 5% GST, but only after filing Annexure V on the GST portal to opt in for that financial year (filing window: 1 January to 31 March of the preceding financial year). The option carries forward automatically each year unless reversed by filing Annexure VI.
Either way, the GTA rate tops out at 5% — never 18%.
Recommendation
Because GTA status is triggered specifically by issuing a consignment note, the company can stay outside the GTA regime — and therefore inside the 18% band — by running Porter jobs as ordinary transport bookings without issuing consignment notes, invoicing customers directly under SAC 9965 at 18% with GST shown on the invoice. This also earns full ITC on fuel, tyres, spares and maintenance for those trips, which the 5% GTA route denies.
The trade-off: this only holds if the underlying paperwork genuinely does not create a document fixing liability for safe delivery of the goods. Authorities look at substance, not the label on the document — if Porter's trip receipt effectively functions as a consignment note (assigns delivery liability, fixes freight terms, etc.), officers can still treat the company as a GTA even without a document titled "consignment note."
Worked example 2A — non-GTA / 18% route (recommended)
Company completes a Porter-booked trip for XYZ Traders (a registered person); freight Rs 50,000; no consignment note issued.
| Line item | Amount (Rs) |
|---|---|
| Freight | 50,000 |
| GST @ 18% (SAC 9965) | 9,000 |
| Total invoice value | 59,000 |
Company charges and remits the GST; XYZ Traders claims Rs 9,000 as ITC.
Worked example 2B — GTA / RCM route (for contrast)
Same trip, but the company issues a consignment note. XYZ Traders is a registered person (a specified recipient).
| Line item | Amount (Rs) |
|---|---|
| Company's bill (no GST charged) | 50,000 |
| GST paid by XYZ Traders directly under RCM @ 5% | 2,500 |
XYZ Traders can claim the Rs 2,500 RCM tax as ITC if used for taxable business; the company gets no ITC on its own inputs (fuel, spares) used for this trip.
Worked example 2C — GTA / FCM route (for contrast)
Same trip; company has filed Annexure V for the year.
| Line item | Amount (Rs) |
|---|---|
| Freight | 50,000 |
| GST @ 5% (GTA forward charge) | 2,500 |
| Total invoice value | 52,500 |
Company remits the Rs 2,500 but cannot claim ITC on its own inputs used for this GTA supply.
ITC Comparison Summary
| Route | Rate | Who pays GST | ITC on company's own inputs | ITC to customer |
|---|---|---|---|---|
| Vehicle hire w/ operator, fuel excluded (9966) | 18% | Company (FCM) | Yes | Yes |
| Vehicle hire w/ operator, fuel included (9966) | 12% | Company (FCM) | Yes | Yes |
| Vehicle lease w/o operator (9973) | = vehicle sale rate | Company (FCM) | Yes | Yes |
| Porter trip, no consignment note (9965) | 18% | Company (FCM) | Yes | Yes |
| Porter trip, consignment note, specified recipient (GTA–RCM) | 5% | Customer (RCM) | No | Yes (on RCM tax paid) |
| Porter trip, consignment note, Annexure V filed (GTA–FCM) | 5% | Company (FCM) | No | Yes |
Compliance Checklist
Caveats
This memo is a general guide based on the GST framework as amended through the September 2025 rate rationalization and is not a substitute for professional advice. Whether a Porter-routed trip counts as GTA or non-GTA is a facts-and-documents question that GST authorities can revisit on audit; given the ITC and RCM stakes involved, the actual trip documentation, the Porter agreement, and customer contracts should be reviewed by a GST practitioner or chartered accountant before this structure is rolled out at scale.
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- 4ITC eligibility review and Rule 42/43 reversal support
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Visit PJRJ & Associates — https://pjrj.inGST classification, transport-sector compliance, and ITC advisoryQuick answers
Direct answers to common questions on this topic.
What GST rate applies when hiring out a goods carriage vehicle with a driver?
When the vehicle is supplied with an operator and fuel is billed separately or borne by the hirer, the supply is taxed at 18% under SAC 9966 (rental of goods carriage with operator) with full ITC on forward charge. If fuel is included in the rental charge, the rate drops to 12% under the same SAC.
How can Porter-platform transport trips attract 18% GST instead of GTA rates?
If no consignment note is issued — the trip is executed as a straightforward point-to-point booking with a delivery/trip receipt but no document fixing liability for safe delivery — the company is a general transportation service provider taxed under SAC 9965 at 18% with full ITC. Issuing a consignment note triggers GTA status and limits the rate to 5% with no ITC on the transporter's own inputs.
What is the current definition of a Goods Transport Agency under GST?
As restated in Notification No. 16/2025-Central Tax (Rate) dated 16 July 2025, a GTA is any person who provides service in relation to transport of goods by road and issues a consignment note, but does not include an e-commerce operator arranging local delivery without consignment notes. The decisive test is issuance of a consignment note — without it, the service is ordinary goods transport, not GTA.
What are the GTA rate options after the September 2025 GST Council changes?
GTA services now carry a single 5% rate with no ITC on the GTA's own inputs. Under reverse charge (RCM), specified recipients self-invoice and pay 5% directly. Under forward charge (FCM), the GTA charges 5% after filing Annexure V on the GST portal between 1 January and 31 March of the preceding financial year. Either way, the GTA rate tops out at 5% — never 18%.
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