GST on transport of goods by road turns on one piece of paper, the consignment note. A tipper owner who carries aggregate, sand or muck and does not issue one is outside the goods transport agency (GTA) definition, and that transport is exempt. Issue one and you are a GTA: the rate is 5% without input tax credit, usually paid by the contractor under reverse charge, or 18% with full credit if the GTA opts to charge it on the bill. That 18% replaced the old 12% option from 22 September 2025, the date the GST Council set for the change.

Thirty days of aggregate haulage, three lakh rupees of freight, and three honest answers to “how much GST?”: nothing, fifteen thousand rupees paid by the contractor, or fifty-four thousand on the transporter’s bill. All three can be correct. Which one applies is decided by how the tipper owner works and what paper travels with the load.

Most disputes on this come from the person paying the freight assuming the transporter will sort the tax out. Under reverse charge, the law puts the tax on the payer.

Is a tipper owner a GTA?

The rate notification defines a goods transport agency as “any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called”. The vehicle does not decide this, and neither does the size of the fleet. The consignment note does.

A consignment note is the document a transporter issues when it takes charge of goods: it names the consignor and consignee, the vehicle, the goods and the route, and the transporter becomes answerable for the load. A builty or a lorry receipt is the same thing by another name, which is what “by whatever name called” covers.

A typical single-truck owner hauling aggregate from a crusher to a site often issues nothing of the kind. The owner loads, drives, tips and raises a freight bill per trip or per tonne. On the words of the definition, that owner is not a GTA. If you run a few tippers this way and want to see the earnings side, see dumper business profit per month.

GST on transport of goods by road other than GTA

Entry 18 of the services exemption notification (12/2017-Central Tax (Rate)) gives a nil rate to “services by way of transportation of goods by road except the services of a goods transportation agency” or a courier agency. This is the main GST exemption on transport of goods by road, and for the small tipper owner it is the one that matters.

The 57th GST Council FAQs, issued in October 2026, also say plainly that the changes made at that meeting do not affect the GST treatment of transport of goods by individual truck owners or operators.

The exemption covers the transport service only. It does not cover a different supply billed under the name “freight”. If the owner sells you the sand and delivers it, that is a supply of sand with delivery, and the sand’s own rate applies.

GST on GTA: the two rates

The 56th GST Council met on 3 September 2025. Its press release on the rate changes lists the service of transport of goods by GTA as moving from “5% without ITC (RCM/FCM)” or “12% with ITC” to “5% without ITC (RCM/FCM)” or “18% with ITC”. The Council said the services rate changes would apply from 22 September 2025.

Who carries the goods, and how GST position Who pays it
Tipper owner, no consignment note Nil (entry 18, 12/2017-CT(R)) Nobody
GTA, has not opted for forward charge, recipient on the reverse charge list 5%, no input credit for the GTA Recipient, under reverse charge
GTA, has opted for forward charge at the lower rate 5%, no input credit for the GTA GTA, on its invoice
GTA, has opted for forward charge at the higher rate 18% with full input credit GTA, on its invoice
GTA, recipient unregistered and not on the reverse charge list Nil (entry 21A, 12/2017-CT(R)) Nobody
Goods carriage rented with operator, fuel cost included 5% with credit of input services in the same line of business, or 18% with credit Owner, on its invoice

The “without ITC” condition at 5% binds the transporter. It means the GTA cannot take credit on the diesel, tyres and repairs it buys to run the service. It is not a restriction written on the recipient.

We could not open the September 2025 amending notification itself on an official site in October 2026, so the table follows the Council’s press release and FAQs. The notification text is what an officer will read, so have your adviser confirm the current entry wording for your case.

GST rate on transport of goods by road under RCM

The reverse charge notification (13/2017-Central Tax (Rate)) says that where a GTA supplies transport by road to one of these recipients, the recipient pays the whole tax:

  • a factory registered under or governed by the Factories Act, 1948
  • a society registered under the Societies Registration Act, 1860 or any other law
  • a co-operative society established by or under any law
  • any person registered under the CGST, IGST, SGST or UTGST Act
  • a body corporate established by or under any law
  • a partnership firm, registered or not, including an association of persons (an LLP counts as a partnership firm, by a 2017 amendment)
  • a casual taxable person

The same notification treats “the person who pays or is liable to pay freight” as the recipient. So a GST-registered contractor who pays the freight is the one who pays 5% under reverse charge, even when the material belongs to the client.

Since 18 July 2022 there is one exception. Reverse charge does not apply where the GTA is registered, has opted to pay tax under forward charge, and puts the Annexure III declaration on its tax invoice. Without that declaration, the default is reverse charge.

For a GTA serving an unregistered person who is not on that list, such as a household or an unregistered sole proprietor, entry 21A of the exemption notification, inserted on 13 October 2017, makes the service exempt.

The small-consignment exemptions are gone

Many freight bills are still written on the belief that small loads are exempt. The original 2017 exemption had two such clauses: freight of up to 1,500 rupees for a consignment in a single carriage, and up to 750 rupees for all goods for a single consignee. Notification 04/2022 omitted both, with effect from 18 July 2022. A GTA freight bill for 1,200 rupees to a registered contractor is now taxable like any other.

Renting a tipper with operator, and hiring to a GTA

Not every tipper deal is transport of a consignment. If a contractor takes a tipper with driver for a month on a fixed rent and the owner pays the diesel, the bill describes renting a goods carriage with operator, not carriage of a consignment. The 56th Council moved that service, where fuel is included, from 12% to 5% with credit of input services in the same line of business, or 18% with credit.

Entry 22 of the exemption notification has a separate case: giving on hire “to a goods transport agency, a means of transportation of goods” is exempt. An owner who attaches a tipper to a transport company, which issues its own consignment notes, can sit inside this entry.

The excavator or loader that fills the tipper is a different supply. Hiring a construction machine is machine hire, with its own SAC and rate, and the GST on construction equipment hire guide covers it. The same applies to a tipper bill that is really a machine-hire bill for work inside the site, so write the scope into the work order.

Worked example: one month of aggregate haulage

Assume a GST-registered road contractor pays 3,00,000 rupees freight for a month of aggregate from a crusher to site. The freight figure is only an example; the rates are those set out above.

How the transporter works On the transporter’s bill Paid by contractor under RCM Total tax
Tipper owner, no consignment note 3,00,000 0 0
GTA, reverse charge (5%) 3,00,000 15,000 15,000
GTA, forward charge at 5% 3,15,000 0 15,000
GTA, forward charge at 18% 3,54,000 0 54,000
Tipper rented with driver and diesel, 5% option 3,15,000 0 15,000

For a registered contractor using the freight in the business, tax paid under reverse charge or charged on a valid invoice is normally available as input credit, subject to the usual conditions. So the real cost difference is cash flow and paperwork. For an unregistered buyer or a client who cannot use the credit, the tax is a cost. The credit rules on your own machines are in GST input credit on construction equipment.

What to ask the transporter for

Before the first trip, get it in writing whether the transporter issues consignment notes. If it does not, keep a short statement to that effect with the freight bills, because it is your support for treating the freight as exempt. If it does, ask whether it has opted for forward charge. If it has, its invoice must carry the Annexure III declaration and show the tax. If it has not, you pay 5% under reverse charge.

A GTA that wants to charge tax itself files Annexure V with the jurisdictional officer. Since 27 July 2023, the window is 1 January to 31 March of the preceding financial year, and the choice continues year to year until the GTA files Annexure VI to return to reverse charge.

Show freight as its own line, with the vehicle number, trip count and rate, so it can be matched to the e-way bill for the material. A mismatch on vehicle number is a common reason loads get stopped, as set out in e-way bill penalty. If freight forms part of a bigger contract, see GST on works contract.

The bottom line

Ask one question first: does the transporter issue a consignment note? If not, the freight is exempt. If yes, it is GTA freight at 5%, paid by you under reverse charge unless the GTA has opted for forward charge and says so on the invoice, or at 18% with credit if the GTA chose that rate. The old 1,500-rupee and 750-rupee exemptions no longer exist.

If you are adding tippers or a loader to carry your own material, compare tipper makers in India, check equipment finance options, and price the haul against live government tenders and opportunities.

Rates, schemes, rules and fees change, and GST notifications are amended often. Confirm the current rate entry, the reverse charge position and your input credit with a tax adviser or the official notification before deciding. A contractor’s own facts decide the outcome.