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Rate issue

29 June 2017

I am an online seller selling on amazon and flipkart. there i am selling footwear and in gst footwear is taxable at 5% upto mrp 499 and at 18% if mrp is more than 499. what will be the tax rate if selling price will be 499 plus 100 rs shipping charges, same 100 rs shipping charges are chrged to us by flipkart and we charge the same amount to customer.

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Karan Batra (Creator: TheProTalks) (2325 Points)
Replied 29 June 2017

As per Rule 7 of determination of value Rules under GST you can claim a deduction of the delivery expense if you are acting as a Pure Agent but there are some conditions attached which you have to fulfil. The conditions are listed below however my interpretation would be that if you are doing delivery by yourself i.e. it’s one of your business and the cost to you is Rs. 100 then you can’t but if you take services from a 3rd party and fulfil all other conditions then you might claim deduction. If you claim deduction, then the effective price for GST is below Rs 499. Pure Agent means a person who: (a) enters into a contractual agreement with the recipient of supply to act on their behalf and incur expenditure or costs in the course of supply of goods or services or both; (b) neither intends to hold nor holds any title to the goods or services (or both) procured on behalf of or provided to the recipient of supply; (c) does not use the goods or services so procured for his own interest; and (d) receives only the actual amount incurred to procure such goods or services.