Applicability of GST by RCM in case of freight service, used to send goods to customer

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This discussion clarifies that GST under the Reverse Charge Mechanism (RCM) is applicable to freight charges paid by a company (ABC) to a transporter (DEF) for delivering goods to a customer (XYZ). This applies even if the freight cost is included and GST is charged on the main invoice for the goods sold to the customer.

Manoj Chauhan

Manoj Chauhan (Querist)
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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)

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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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.

Manoj Chauhan

Manoj Chauhan (Querist)
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10 October 2025 Thanks for the reply

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