Should GST be charged on freight charged in a tax invoice

Page no : 3

PRABIR PAUL (*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.) (1443 Points)
Replied 07 July 2017

I think freight is calculated under gst because section 15 said that all transaction value will be consider as value of supply.

So the answer is YES GST should be calculated on freight.

1 Like

CA Sukesh Bhatia (MANAGER) (1344 Points)
Replied 07 July 2017

If you are supplying goods and also charging freight charges on the invoice, it will be treated as a composite supply and GST will be charged at the rate at which goods are taxable. That is as per the rate at which principal supply is taxable. In your case, supplying goods is principal supply.

1 Like

k.raghu natha reddy (articleship student) (41 Points)
Replied 07 July 2017

Can any give your comment on below transaction

My company sold goods vale of 100000 and incurred 5000 as transportation charges which is included in invoice and payable by recepient. And the Company is paying IGST @ 5% on 105000 ie 5250

here my doubt is

My company is considering its sale income 100000 in profit and loss account and 5000 as liability in balance sheet

Whether this treatment is correct or not?

Please suggest me

RAJA P M ("Do the Right Thing...!!!") (127400 Points)
Replied 07 July 2017

Originally posted by : k.raghu natha reddy
	Can any give your comment on below transaction My company sold goods vale of 100000 and incurred 5000 as transportation charges which is included in invoice and payable by recepient. And the Company is paying IGST @ 5% on 105000 ie 5250 here my doubt is My company is considering its sale income 100000 in profit and loss account and 5000 as liability in balance sheet Whether this treatment is correct or not? Please suggest me

NO....

The Liability is the tax amount Rs. 5250.

Rs. 100000 is sale income and also Rs. 5000 transportation charges Indirect Income....

Chandrasekar (article Student) (23 Points)
Replied 08 July 2017

Supplier are selling exempted goods only and collects freight along with sale bill. Buyer concern are also handling exempted goods only. Here who is liable to pay GST on freight Charges.?

Supplier - LTD Company

Buyer - Partnership firm

Kindly advice

r k yadav (CA Practice ) (29 Points)
Replied 08 July 2017

But for amount below 5,000 GST in RCM not applicable.

prasanna (accountents) (22 Points)
Replied 15 July 2017

Dear Sir, if multipule tax is charged on supply, then what is the % of Transport & Forwarding

eg. if item A 18% and item B 28%, then assume Transport Charges 500 ,what will be GST %Tax for 500 ?

Bhavleen Kaur Oberoi (Chartered Accountant) (228 Points)
Replied 15 July 2017

Calculate proportionate Transportation Charges on 18% and 28% items and charge rate of tax on transportation accordingly. For Example : Goods sold @ 18 % =Rs10000

Goods Sold 28% =RS.20000

Transportation=Rs.3000

Then TRansportation charges attracting 18% will be =Rs 3000*10000/30000=Rs.1000

Transportation charges attracting 28% will be = Rs.3000*20000/30000=Rs.2000

Bhavleen Kaur Oberoi (Chartered Accountant) (228 Points)
Replied 15 July 2017

@ Chadrasekar "Supplier are selling exempted goods only and collects freight along with sale bill. Buyer concern are also handling exempted goods only. Here who is liable to pay GST on freight Charges.? Supplier - LTD Company Buyer - Partnership firm Kindly advice "

Freight charged on the Invoice containing exempt goods willnot attract any GST since the principal supply is exempt from GST then Freight charged along with it will be exempt.