Applicability of GST by RCM in case of freight service, used to send goods to customer
This query is : Resolved
07 August 2024
Dear Sir/Madam,
Company "ABC" is selling goods to company "XYZ".
For this, ABC is adding freight in the invoice of the goods sold.
For freight, ABC is availing itself services of freight from company "DEF".
In the invoice for sale of goods, (Basic Amount + Freight) + GST is charged (Forward charge)
ABC is required to pay freight charges to DEF.
Whether GST will be applicable in the transaction between ABC and DEF (Transporter), taking into account GST is already charged in the main invoice of goods sold to XYZ (Buyer of goods)
Company "ABC" is selling goods to company "XYZ".
For this, ABC is adding freight in the invoice of the goods sold.
For freight, ABC is availing itself services of freight from company "DEF".
In the invoice for sale of goods, (Basic Amount + Freight) + GST is charged (Forward charge)
ABC is required to pay freight charges to DEF.
Whether GST will be applicable in the transaction between ABC and DEF (Transporter), taking into account GST is already charged in the main invoice of goods sold to XYZ (Buyer of goods)
13 August 2025
Yes, GST under Reverse Charge Mechanism (RCM) will be applicable on the freight charges paid by ABC to DEF (GTA - Goods Transport Agency), even though freight is included in the outward invoice to XYZ.
10 October 2025
Thanks for the reply
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