VAT on Freight

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 November 2009 Sir,

My query is with respect to VAT laws in Karnataka. I would like to know should VAT be paid on Freight (inwards or outwards) mentioned in the invoice. If we raise a debit note seperately for freight charges, no VAT is payable. But if the same is included in the invoice itself (to save documentation) why should VAT be paid on total invoice amount?

Rule 3 of Karnataka VAT Rules deals with determination of turnover. No where in these rules is it mentioned that freight should be included in taxable turnover. Are we right in excluding freight from VAT?

CA Chandra Kishore Bajpai

CA Chandra Kishore Bajpai (Expert)
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13 November 2009 There is no vat on freight if basic taxable value of goods has been shown separately in Invoice.
If the rate of the item is inclusive of freight and there is no separate bifurcation then vat is payable on basic sales amt .( including freight).