Reverse-charge on freight ends 1 July 2025—are you ready?
1 · What’s Changing on 1 July 2025
| Until 30 Jun 2025 | From 1 Jul 2025 |
|---|---|
| Reverse-Charge Mechanism (RCM) on most freight—the consignee paid GST. | Forward-Charge for all freight—the carrier/forwarder collects & remits GST. |
| Road GTA: 5 % (forward) or 12 % (reverse). | Single 5 % GTA rate (12 % with ITC still optional). |
| Ocean-export freight exempt only to 30 Jun. | Exemption extended to 30 Sep 2025. |
| E-invoicing only above ₹5 Cr turnover. | All logistics GSTINs must e-invoice from 1 Apr 2025. |
2 · 2025 GST Rate Card for Logistics
| Mode / Service | GST Rate | ITC Rule |
|---|---|---|
| Road (GTA) | 5 % | No ITC at 5 % (12 % with ITC optional). |
| Rail Freight | 5 % | No ITC. |
| Inland Waterways | 5 % | No ITC. |
| Domestic Air Freight | 18 % | ITC available. |
| Ocean Freight – Export | 0 % (to 30 Sep 2025) | Exempt. |
| Ocean Freight – Import | 5 % IGST | ITC to importer. |
| Warehousing of agri produce | 0 % | Fully exempt. |
3 · Exemptions & Special Cases
| Scenario | GST? | Rule / Notification |
|---|---|---|
| Transport of milk, salt, newspapers | Exempt | Notification 12/2017 |
| Small GTA (< ₹20 L turnover) opts out | Recipient pays RCM 5 % | Section 9(3) |
| Export freight billed overseas (FOB) | Importer pays RCM IGST 5 % | Place-of-Supply |
| India → Nepal exports via Kolkata port | Exempt | Indo-Nepal Treaty |
4 · Quick GST Calculator Walk-Through
- Pick mode (road, air, ocean, rail).
- Enter freight value (e.g., ₹1,00,000 for GTA).
- Select forward-charge or RCM scenario.
- Tool returns GST amount, ITC eligibility & landed cost.
Tip: Use the GSTN e-invoicing sandbox or any public freight GST calculator to test scenarios.
GST Calculator Coming Soon on Cogoport OS!
5 · Savings Snapshot (Road GTA, 20 Loads / Month)
| Item | RCM Model (pre-July) | Forward Model (post-July) | Monthly Effect |
|---|---|---|---|
| Cash timing | GST paid upfront (self-invoice) | GST paid on vendor invoice (30-day credit) | +30 days float |
| Compliance effort | Self-invoice + RCM ledger | Just book supplier invoice | ≈1 hr admin saved / load |
| ITC claim | After cash payment | On invoice upload | Faster credit |
Outcome: ≈ ₹50 k working-capital freed and ~20 hrs admin saved monthly for a midsize shipper.
6 · FAQ
- Will my freight cost rise? Base rates stay; GST is still 5 %. Only who remits the tax changes.
- Can a transporter still use 12 %? Yes—12 % with ITC is optional. Check your invoice.
- Is export ocean freight exempt? Yes until 30 Sep 2025. After that, 5 % forward IGST is proposed.
- Do small truckers have to register? Below ₹20 L turnover, they can opt out; customer then pays RCM @ 5 %.
