Rate of GST on Recovery of freight from customer, after paying to transporter on behalf of customer

This query is : Resolved

Manoj Chauhan (Querist)
Follow

11 October 2025 Dear Sir/Madam,

If the seller pays to the transporter (on behalf of the buyer), separately, with 5% GST on RCM basis and then raises a debit note on the buyer, how much GST will be application on such recovery? (5% or 18%).

Thanks.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

11 October 2025 The seller pays the transporter and 5% GST under RCM on behalf of the buyer.

The seller then issues a debit note to recover the payment from the buyer.

As per GST law, since the GST on the expense (transportation) has already been paid via RCM, treating the recovery as a reimbursement does not attract further GST provided the seller acts as a "pure agent" for the buyer in this transaction.

If the debit note covers only the amount paid, with no markup, the recovery is not a taxable supply and no further GST is applicable.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

11 October 2025 5% GST under RCM is paid by the service recipient (buyer) through the seller.

No GST is levied on the subsequent recovery via debit note if it's a reimbursement by a "pure agent".

If the seller adds any markup or profit, that component would attract GST as it is no longer just a reimbursement.

In short, the recovery of transporter payment at 5% RCM by debit note from the buyer does not attract further GST, provided it is a pure reimbursement without markup.

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

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

SHYAM SUNDER GULATI

ARUP BHATTACHARYA

Ahamed Kabeer

CA Jyoti Singh

Nayan shetty

Subscribe Now

Rate of GST on Recovery of freight from customer, after paying to transporter on behalf of customer

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA