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Freight Bill

This query is : Resolved 

We have Manufacturing Company (Pvt Ltd). We purchase our Raw materials from another manufacturing company. They send materials to our factory by their own trucks.

They issue two type of Invoice one is Materials Invoice and another is Freight Invoice.
Now Question is:
Q1/ Can a manufacturing company issued separate Freight Invoice? Is manufacturing company fall under GTA service Provider?
Q2/ What will be the rate of GST on freight Charge?
Q3/ Can we take ITC from Freight Bill?
Q4/ is RCM applicable for me?

Please Guide me


Manufacturing Company is not GTA
GST rate will be the same as of rate of principal supply.
Yes , You can take ITC
RCM not applicable

01. it is NOT GTA
02. The rate of principal supply will be the rate of freight
03. ITC is available
04. RCM is not applicable

Mam/Sir
They issue separate Freight invoice and charge 18% but materials GST rate is 12%

There is always an argument regarding composite supply versus mixed supply. It is better to have opinion on such cases. Probably the stand of the company could be that these two activities viz material supply and transport service are independent of each other and hence they are following separate rates. This is NOT a good policy

Sir, whether a manufacturing company can issue a separate freight invoice if they are not registered as a transporter under GST.

No.
Manufacturing company should NOT do such a practice. Dont know who has misguided the company.

Sir/ Madam
We are confused that some expert remark that “if manufacturers have own trucks to transport the goods to customer and issue separate invoice to you the GST rate will be 18% as manufacturer are transporting his materials to his customers. It will not fall under GTA.”
What rule we follow Pl tell me according to we will talk to our seller

Are you able to claim ITC on both?

according my view we take ITC OF BOTH INVOICE

yes, you can very well avail ITC for both

They issue separate Freight invoice and charge 18% but materials GST rate is 12%. sir I want to know Is he do separate bill as per GST rule? Actually I want to know What GST Law say regarding above scenario that all........


They issue separate Freight invoice and charge 18% but materials GST rate is 12%. sir I want to know Is he do separate bill as per GST rule? Actually I want to know What GST Law say regarding above scenario that all........


As per the intent of GST a single invoice be prepared.
So long as you are able to get ITC on both, you need to take the call as to how much you want to stretch it for 6% of additional GST (for which you are availing ITC) hampering your cash flow.

In my view, manufacturer who has registered as a manufacturer in GST van not act as a transporter. He can use his vehicle but it will be considered as composite supply and rate will be that of principal supply (12%)
Gujarat AAR holds supply of principal goods/services along with freight and insurance as a ‘composite supply’ as defined u/s 2(30) of CGST Act, 2017; Referring to CBEC Flyer No. 4, dated January 1, 2018, states that, in the case of the applicant, the ex-works plus freight and insurance is to be treated as composite supplies whereby Ex-works is the ‘principal supply’; Comments that charging of freight and insurance portion in separate invoices would not change the nature of supply.
Like this, so many case & AAR are available under GST

For further details and clarity, refer following link:-

https://taxguru.in/goods-and-service-tax/gst-payable-freight-insurance-shown-separately-invoice.html


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