11 May 2013
If goods are sold at factory gate and freight is charged extra for delivery the goods at consignee address, freight will be charged separately after charging excise duty and sales tax. If the assessee and the buyer are not related persons and the price is also the sole consideration for sale but only the delivery of goods is made by the assessee at a place other than the factory/warehouse, then the assessable value shall be the "transaction value" without the addition of the cost of transportation from the factory/warehouse upto the place of delivery. However, exclusion of cost of transportation is allowed only if the assessee has shown them separately in the invoice and the exclusion is permissible only for the actual cost so charged from his buyers. If the assessee has a system of pricing and sale at uniform prices inclusive of equated freight for delivery at factory gate or elsewhere, no deductions for freight element will be permissible.
THANKS. Please click on "Thank User", if you are satisfied with my reply. Rajeev Kumar Garg (M.Com, L.L.B.) Consultant (Excise, Customs & Service Tax)
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