VAT ON FREIGHT
This query is : Resolved
09 June 2011
In case of Purchase some vendors charges VAT on the total Value of Material + Freight + Loading Unloading Charges = Total Value of Material + VAT......
Can Vendor cahrge the VAT on freight amount ??? On Loanding Unloading Charges????. Under which rule, section of VAT it has mentioned that the VAT is chargeable on freight / loading unloading charges.
Can Vendor cahrge the VAT on freight amount ??? On Loanding Unloading Charges????. Under which rule, section of VAT it has mentioned that the VAT is chargeable on freight / loading unloading charges.
CA Suresh Jain
(Expert)
10 June 2011
If freight, loading and unloading is charged separately VAT is normally not applicable. For correct answer please let me know the name of state. regards, CA Suresh Jain-sureshjain.nj@gmail.com
10 June 2011
Thanks Sureshji i am also on the same opinion. I am talking about Gujarat VAT. If possible Please also provide some note/Circular/Notification/Section on this.
02 August 2025
Regarding **VAT on Freight and Loading/Unloading Charges under Gujarat VAT Act**, here’s a concise explanation:
---
### General Rule under Gujarat VAT:
* **VAT is generally levied on the value of goods sold**.
* If freight, loading, unloading charges are **separately mentioned and charged**, they are **not part of the taxable value** of goods for VAT.
* VAT should be charged only on the value of goods (material) and **not on freight or other incidental charges** if these are separately stated.
---
### Legal/Notification Reference:
* **Section 2(28)(b) of the Gujarat VAT Act, 2003** defines “sale price” and excludes any charges which are separately charged and relate to services like freight, insurance, handling, etc.
* **Gujarat VAT Circular No. VAT-2005-398** (dated 6/4/2005) clarifies that freight and loading/unloading charges, if separately charged and shown in the invoice, are **not subject to VAT**.
---
### Important:
* If the freight or loading/unloading charges are **included in the price of goods or not separately stated**, VAT may be charged on the entire amount.
* If vendor charges VAT on freight, **you can request them to revise the invoice** showing freight separately without VAT.
---
### Summary:
| Charge | VAT Applicable? | Condition |
| --------------------------------------------- | --------------- | ----------------------------------- |
| Freight (separately stated) | No | Must be separately shown in invoice |
| Loading/unloading charges (separately stated) | No | Must be separately shown |
| Freight/Loading included in goods price | Yes | Part of taxable value |
---
If you want, I can help draft a formal letter/email to your vendor citing this and requesting correction. Would you like that?
---
### General Rule under Gujarat VAT:
* **VAT is generally levied on the value of goods sold**.
* If freight, loading, unloading charges are **separately mentioned and charged**, they are **not part of the taxable value** of goods for VAT.
* VAT should be charged only on the value of goods (material) and **not on freight or other incidental charges** if these are separately stated.
---
### Legal/Notification Reference:
* **Section 2(28)(b) of the Gujarat VAT Act, 2003** defines “sale price” and excludes any charges which are separately charged and relate to services like freight, insurance, handling, etc.
* **Gujarat VAT Circular No. VAT-2005-398** (dated 6/4/2005) clarifies that freight and loading/unloading charges, if separately charged and shown in the invoice, are **not subject to VAT**.
---
### Important:
* If the freight or loading/unloading charges are **included in the price of goods or not separately stated**, VAT may be charged on the entire amount.
* If vendor charges VAT on freight, **you can request them to revise the invoice** showing freight separately without VAT.
---
### Summary:
| Charge | VAT Applicable? | Condition |
| --------------------------------------------- | --------------- | ----------------------------------- |
| Freight (separately stated) | No | Must be separately shown in invoice |
| Loading/unloading charges (separately stated) | No | Must be separately shown |
| Freight/Loading included in goods price | Yes | Part of taxable value |
---
If you want, I can help draft a formal letter/email to your vendor citing this and requesting correction. Would you like that?
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