This query is : Resolved 

31 January 2009

When purchases of hardware material transport or freight charges are inclued & VAT on the that amount are calculated is correct?

31 January 2009

If your material price is quoted as that the goods will be delivered irrespective of the distance then vat is chargeable on the total amount.

If freight charges are shown seperately and it varies from plance to place then you need not charge vat on the same.

CA supriyo saha (Expert)
01 February 2009

i think vat on freight charges will not be justified. i have seen in vendors bills that they charge transportation charges separetely after levying vat@4%. so i think vat will not be charged.

K V Subba Rao (Expert)
01 February 2009

If freight charges are shown seperately, VAT is not collected.

If vendor has fixed his rate after considering freight element also just like material or labour or overheads, VAT is calculated on total rate.

Normally, freight element is calculated seperately due to huge variations between different distribution points from manufacturing point.

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