Freight

Save Share

This query is : Open

Pankaj Arya (Querist)
Follow

24 July 2012 Dear Experts

We are charging freight from our customers for the material supplied to them. This freight may be more than or less than the actual amount incurred by us for transporting the goods to customer.

Please guide me w.r.t. the applicability of taxes on freight...VAT or Service Tax.

Note:Goods are sent by Courier as well as road transport.

rgds

Pankajj Arya

Suresh Mittal

Suresh Mittal (Expert)
Follow

24 July 2012 First, their is no VAT on freight , if charged separately. Secondly, the service tax is applicable on service of Goods Transport Agency, so the Service Tax would be applicale on the bill amount of the Transport agency and not on your inflated freight value.

Pankaj Arya

Pankaj Arya (Querist)
Follow

25 July 2012 Dear Sir

Thanks for the prompt reply. The reply suits me & will solve my problem....

I will be grateful if you can share the relevant section, case law supporting the above view

Thanks & regards

Pankajj Arya

Suresh Mittal

Suresh Mittal (Expert)
Follow

26 July 2012 for Service Tax See NN 26/2012, which talk about services of goods transport agency and for Sales/Vat read definition of Sale u/s 2(h) of CST Act.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
Follow

29 July 2012 Mr Pankaj Arya,
Sorry,Iwould like to differ a bit,freight is not exempt from VAT in most of the States. You have to add freight to the price of goods while collecting VAT/CST....MJK

Pankaj Arya

Pankaj Arya (Querist)
Follow

30 July 2012 Sir

Thanks for the update.

To my understanding, in Delhi VAT, it is excluded, i.e. no VAT on freight. Silimlarly for CST, it is excluded from the definition of Sales....

I know that in some other states, VAT is charged on Freight.

Can u please share the name of the states where VAT is charged on freight. We have offices in many states...

Many Thanks...

Pankajj Arya

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
Follow

30 July 2012 Mr Pankaj Arya,
For example, Karnataka. I have seen in some other state Acts also. Later I will inform you....MJK

Pankaj Arya

Pankaj Arya (Querist)
Follow

31 July 2012 Thanks Sir...a comprehensive list of all such states will help me a lot.. please do send me the same...

regards

Pankajj arya

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now