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Microlesson · 5-min read

GST Exemptions - Transportation of Goods and Passengers

# Transportation Services - GST Exemptions

## Transportation of Goods by Air

  • Services by air, of goods, from a place outside India to a customs station in IndiaEXEMPT
  • Satellite launch servicesEXEMPT

## Transportation of Goods by Rail/Vessel

Following goods, when transported by rail or vessel, are EXEMPT:

  • Relief materials for victims of natural/man-made disasters
  • Defence or military equipment
  • Newspaper or magazine registered with Registrar of Newspapers
  • Railway equipment or materials
  • Agricultural produce
  • Milk, salt, food grain (including flour, pulses, and rice)
  • Organic manure

## Goods Transport Agency (GTA) Services

  • Services by GTA to an unregistered personEXEMPT
  • Services by GTA to a person registered only for TDS under Section 51EXEMPT

## Passenger Transportation Exemptions

  • Services by way of giving on hire:
  • To a state transport undertaking, a motor vehicle meant to carry more than 12 passengers → EXEMPT
  • To a local authority, an electrically operated vehicle meant to carry more than 12 passengers → EXEMPT
  • To a GTA, a means of transportation of goods → EXEMPT
  • Motor vehicle for transport of students, faculty, and staff to a person providing exempt education services → EXEMPT

## Toll Charges and Road Access

  • Access to road or bridge on payment of toll charges → EXEMPT
  • Overloading charges/Additional toll charges → EXEMPT (same treatment as principal supply)

Worked example

### Example 1

Example 1: ABC Ltd. transports relief material to flood-affected areas via Indian Railways. Is GST applicable?

Answer: No. Transportation of relief material for victims of natural disasters by rail is EXEMPT from GST.

### Example 2

Example 2: A GTA provides services to Mr. X, an unregistered individual, for transporting household goods.

Answer: Services provided by GTA to an unregistered person are EXEMPT from GST.

### Example 3

Example 3: XYZ School hires a motor vehicle from PQR Travels for transporting students.

Answer: Hiring of a motor vehicle for transport of students to an educational institution providing exempt services is EXEMPT.

⚠️ Common exam mistakes

  • Confusing 'transportation of goods by air from outside India to India' (exempt) with general air freight services (taxable).
  • Treating GTA services to a person registered only for TDS (Sec 51) as taxable - it is exempt.
  • Forgetting that hire of vehicles for >12 passengers to state transport undertaking is exempt.
  • Missing that organic manure transportation by rail/vessel is exempt but by road by GTA may not be.
  • Assuming overloading charges are taxed separately - they follow the principal supply (toll is exempt, so overloading is exempt).
Bare-Act text Entries on transportation services · Notification No. 12/2017-Central Tax (Rate) · click to expand
Notification No. 12/2017-CT(R) and related entries providing exemptions on transportation of specified goods by rail/vessel/air and on GTA services to unregistered persons.
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