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.
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Cartage SAC Code Classification and GST Rates
Here are some commonly used HSN codes and GST rates for this category
4 Digit SAC Code Classification
6 Digit SAC Code Classification
| HSN/SAC Code | HSN/SAC Code Title | GST Rate |
|---|---|---|
| 996422 | Long-distance transport services of passengers through Road by Bus, Car, non-scheduled long distance bus and coach services, stage carriage etc | 18% |
* GST rates may vary based on the latest GST notifications and amendments
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.
