Tax & compliance · Fact sheet

GST on coal transport: GTA, RCM 5% and the 18% coal rate

By Shri Govinda accounts desk · Updated 21 July 2026 · Reviewed against notifications in force

Coal invoices confuse people because two different GST treatments travel on the same truck: one on the coal itself, and one on the freight for moving it. Here is the current position, in one page.

1. GST on the coal (the goods)

Coal is classified under HSN 27011200 (bituminous coal, not agglomerated). With effect from 22 September 2025, following the 56th GST Council's rate rationalisation, coal attracts 18% GST. Before that date it was 5% plus GST Compensation Cess of ₹400/tonne — the cess stands merged into the new rate structure.

2. GST on the freight (the transport service)

Road transport of goods by a Goods Transport Agency (GTA) — a transporter who issues a consignment note, as we do — is taxed under Notification 13/2017-Central Tax (Rate). The default mechanism is Reverse Charge (RCM):

Mechanism	Rate	Who pays the GST	Transporter's ITC
RCM (default)	5%	The recipient (your plant), directly to Government	Not available to GTA
Forward charge	5%	Transporter collects & pays	Not available
Forward charge	12%	Transporter collects & pays	Full ITC to GTA

What this means on our invoice: under RCM, the freight bill shows no GST added — the invoice carries a Reverse Charge declaration and your company discharges 5% directly and claims it as ITC. The transporter must not charge you GST again on the same freight.

3. E-way bill threshold

An e-way bill is mandatory for consignments where the goods value exceeds ₹50,000 — which in practice means every commercial coal load. Validity runs one day per 200 km.

4. What a clean coal freight invoice contains

GSTIN of transporter and recipient, with place of supply
Consignment note (LR) number and vehicle number(s)
SAC 9965 for the transport service; HSN 27011200 referenced for the cargo
An explicit "Tax payable under Reverse Charge — Yes" declaration where RCM applies
Quantity, rate and value matched to the weighment slips

Every Shri Govinda invoice is generated on our own ERP with these fields enforced — which is why our clients' auditors rarely call us twice.

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This fact sheet reflects the position as generally applicable on the date above and is provided for information — confirm treatment for your specific case with your Chartered Accountant. Rates and notifications change; the dateModified above tells you when this page was last reviewed.