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freight/transportation charges in tax invoice

chaitanya (ceo) (171 Points)

28 June 2017

plz guide:_

whether freight shown in invoice is subject to GST.
what's the rate.
our product has 28% GST

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3 Replies

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 28 June 2017

freight charges are not subjected to GST

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 28 June 2017

Please see deifnition of compsite supply. If the risk and reward is only after delivery to the customer, the freight value would have to be included in the value of the principal supply. In your case- 28%.

However if the supply is on ex factory, then the transportation is to the account of the customer. In this case even if supplier pays it is separate and liable for the GST as per applciable rate for transportaiton.

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Piyush Goyal (2 Points)
Replied 03 July 2017

X sell goods to Y to ex-factory basis. Freight is on account of Y. However x pay some advance to transporter on behalf of Y and mention that advance amount on his invoice. Y later on pay the balance amount to transporter and what is paid by X to transporter is paid by Y to X in settlement of x's invoice since X has separately mentioned freight on his invoice. In this case, whether X has to pay GST on total invoice value or can deduct freight on the basis of pure agent. Kindly reply Madhukar ji. Thanks