Cartage HSN Code: Understanding the Classification for Freight and Transportation Charges
Cartage refers to the short distance movement of goods within a city or industrial area, usually by tempo, truck or local transporter. Under GST, cartage, freight and cargo handling are treated as services, and you must use the correct service accounting code (SAC) when raising invoices.
Correct cartage HSN code selection helps you apply the right GST rate, claim input tax credit where allowed and keep your GST returns accurate and consistent.
Cartage HSN Table and GST Overview
| HSN / SAC Code | Product or Service Description | Product Type / Variant | Typical GST Rate |
|---|---|---|---|
| 996511 | Road transport of goods by goods transport agency | Cartage or freight by road with consignment note | 5% or 12% (subject to conditions) |
| 996521 | Freight transport services by rail | Cartage and freight for rail transport of goods | 5% |
| 996731 | Cargo handling services | Loading, unloading, packing and unpacking linked with freight | 18% |
| 996799 | Other supporting transport services | Combined cartage, handling and local logistics support | 18% |
What Is the HSN Code for Cartage Services?
In practice, cartage is classified based on the nature of supply. If you act as a goods transport agency and issue a consignment note, you generally fall under the road transport of goods category. If you only provide loading, unloading or handling, you may fall under cargo handling services. For traders who simply recover cartage from customers as part of a sale, the tax treatment depends on whether cartage is a separate supply or part of a composite supply of goods. When it is part of a composite supply, GST often follows the rate of the goods.
How Freight and Transportation Charges Are Classified under HSN?
Freight and transportation charges can be grouped by mode of transport (road, rail, air or vessel) and by whether you provide pure transport or full logistics support. Pure transport is covered by transport of goods entries. Combined services like packing, handling and documentation generally fall under other transport support services.
GST Implications on Cartage and Freight Services
Most cartage and freight services attract GST at standard service rates. Businesses should check whether reverse charge applies for particular categories and periods. Using the correct cartage HSN code makes it easier to claim input tax credit on inward transport and to match GSTR-1, GSTR-2B and GSTR-3B data without disputes.
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Frequently Asked Questions
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Is cartage always taxed at the same rate as goods?
No. If cartage is billed as a separate service, GST generally follows transport or logistics service rates. When cartage is naturally bundled with goods, it may follow the rate of the goods as part of a composite supply.
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Which HSN code should a small trader use for local delivery charges?
If local delivery is not a separate service and only a part of goods supply, many traders treat it as part of the goods value. Where it is billed separately, an appropriate transport support service code should be used after taking tax advice.
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Is GST payable on cartage paid to an unregistered local transporter?
GST liability depends on whether the supply is covered by reverse charge and the period in which service is taken. Rules have changed over time, so you should confirm current provisions before deciding.
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Can a wrong cartage HSN code be corrected later?
Yes. You can make corrections through amendment documents in later returns, but repeated misclassification can lead to scrutiny. It is better to select the correct code from the start.