Freight charges

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2017 our tax invoice is including 18% materials and 28% materials and freight charges, what % of tax we have to charge for Freight Charges?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 July 2017 5% gst applicable on freight.

Guest

Guest (Expert)

08 July 2017 I beg to defer in this case freight will be proportionately bifurcated between 18% and 28% material and accordingly that rate will apply

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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25 July 2024 The GST (Goods and Services Tax) treatment for freight charges depends on various factors, including whether the freight charges are separately stated on the invoice or not, and whether they are related to the supply of taxable goods or services. Here’s a general guideline based on typical scenarios:

1. **Freight Charges Included in the Invoice (Not Separately Stated):**
- If the invoice includes both taxable goods/services and freight charges, and the freight charges are not separately stated, then the tax rate applicable to the main supply (goods/services) will apply to the entire invoice amount.
- For example, if the invoice includes both goods taxed at 18% and freight charges, then 18% GST will apply to the entire amount including freight charges.

2. **Freight Charges Separately Stated on the Invoice:**
- If the freight charges are separately mentioned on the invoice and are attributable to the supply of taxable goods or services, they will be taxed at the applicable rate based on their nature.
- Generally, freight charges are considered as part of the supply of goods/services and taxed at the same rate as the main supply.

3. **Different Tax Rates on Goods and Freight:**
- If the goods are taxed at different rates (e.g., 18% and 28%), and the freight charges are separately stated, then the applicable GST rate for the freight charges would typically align with the nature of the main supply (goods/services) to which the freight relates.

4. **Special Cases (like Export/Import):**
- In cases involving export or import transactions, GST treatment may vary, and specific rules may apply. For exports, the concept of zero-rated supplies may apply where GST is charged at 0%.

**Example:**
- If the tax invoice includes:
- Taxable goods at 18% GST
- Freight charges separately stated
- Then, both the goods and the freight charges would be taxed at 18% GST, assuming the freight charges are part of the supply of taxable goods/services.

It’s crucial to ensure compliance with GST regulations specific to your country or region, as rules may vary. For precise advice tailored to your situation, consulting with a tax advisor or GST consultant is recommended. They can provide guidance based on the exact details of your transactions and help ensure accurate GST compliance.

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