Freight

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If you pay for freight as a trader, you are liable to pay GST on these charges, typically at a 5% rate. You can claim Input Tax Credit (ITC) for this GST paid under Reverse Charge Mechanism (RCM). If you charge freight separately on your invoice, you must also collect and pay GST on it, but this is offset by the ITC you've already claimed. Alternatively, GST might be applied at the rate of your main goods, but paying 5% is often recommended to avoid disputes.

sankar ponnan

sankar ponnan (Querist)
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19 August 2020 Sir
I am trader and at the time of sales I pay freight. Am i liable to pay gst on freight charges? if yes, what is the percentage of gst on freight?
guide me
thanks in adv

Lekhraj sood

Lekhraj sood (Expert)
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19 August 2020 Yes, you have to GST on freight @ 5%.

sankar ponnan

sankar ponnan (Querist)
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19 August 2020 Q.NO.1
It means, the person who pays the freight is liable to pay gst . Am i correct sir?
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Q.No.2
In case If I charge the freight in invoice, then I collect gst totally for sales and freight from the buyer and pay it after adjusting ITC to govt? Here, we should pay gst on the freight again?
guide me sir
thanks in adv

Lekhraj sood

Lekhraj sood (Expert)
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19 August 2020 Ans 1- Since you are bearing and paying freight you will have to pay GST on RCM basis. YOU will be eligible to avail the ITC of this GST paid.
Ans-2 . If you charge freight separately on the invoice then also you have to pay GST on it. It will not be double tax payment because you have taken the credit of the GST paid on RCM basis.
There is another school of thought that GST will be leviable on the freight shown on your sale invoice at the rate of GST applicable to your main item of sale.
If you want to avoid litigation then you should apply the GST rate which is applicable to the item you are supplying.

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