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Cst on freight

Learner (Student) (409 Points)

14 March 2014

I want to know whether I need to charge CST @ 2% on Freight which is shown separately in the same invoice -eg

A. Item XXX 1000

B. Freight 200

C. Cst @ 2% on A 20

Total 1220

Is the above working correct ? Or do we need to charge on A + B

Your replies will be appreciated

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1 Replies

Deepak Gupta (CA Student) (15922 Points)
Replied 14 March 2014

Freight separately charged on interstate sale will not form part of sale price, because the definition of sale price under the CST Act specifically excludes freight charged separately.
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[As per sec. 2(h) of The Central Sales Tax Act, 1956, "sale price" means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged.]
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It will be better if you mention the freight charges after the CST amount. For eg.,
.
Item xxx