Entry for freight

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We are charging freight of 1000 in invoice of 100,000 that will be paid by us to Transport  but ultimately paid by buyer

is below  enrty correct

Buyer                         DR        106000            

To sale                                                     100,000

To Vat  5%                                                     5000

To frieght  payable                                        1000  ( Pl suggets the Group )

on payment to transport

Friegt payble                                        Dr                1000

To Transport Com                                                                    1000

and

Transport Com                                Dr   1000

to bank                                                                  1000

 

also suggest that is there any liabilty of service tax on Seller

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Replies (3)

With respect to the Service Tax liability, assuming that you are a company, since, you are making payment to the transporter, the entire liability to deposit Service Tax lies on you which is ST @ 12.36% on 25% of the value of freight which means 12.36% on 250 as per the above example cited.

Entry is ok. But if you are mentioning the same in the invoice then commercial tax deparment will asko on freight value also. Hence it is advisable either to compute vat on Rs.101000 or raise separate Debit note for collection of freight.

 We purchase goods amounting to Rs 1025000/-. As per agreement with supplier will bear all cost upto the factory gate. But we pay Rs 25600/- towards carriage inward. At last we adjust the same amount from the bill . Then what journal entry we pass in our book and what about entry tax on fright.  Please comment on this issue Sir


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