Gst on expenses

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MADDIRALA SUNIL KUMAR

ACCOUNTANT

27 Points Joined January 2011

RESPECTED SIR,MY Doubt is i am supplier we are paying freight on behalf of receiver and that was including in the supplier bill. so my doubt is tax rate is applicable on supplier invoice,if applicable which rate was applicable whether freight rate or goods rate.in this condition this type belongs composite supply or normal supply.and another doubt was serivice provider i.e.lorry owner will deduct gst on freight on supplier or receiver. please provide full explantion with clarity.

Replies (3)

Kapil Mittal

STUDENT

53 Points Joined March 2009

GTA are under reverse charge so they do not have any obligation to charge gst on that.
further if you have charge gst in invoice then the raté of tax of goods are charged for the freight amount also as per composit supply rue.

natarajan

SM - Audit & Taxation

156 Points Joined September 2007

Dear team,

Understand from your query:

1) You are supplier of goods and collecting freight charges which is paid by you.

In this case, this is an composite supply. One, supply of goods, Two, supply of services. ( Transport charges)

As per the composite supply definition, the pricipal supply is supply of goods. Then, on transport charges also the same rate applied. To make it very clear, you assume your product falls under 5% GST. Service tax rate is 18% ( assume), still the GST for this composite supply is 5% only.

2) As per reverse charge provisions, the receipient of service ( You) while making payment to transporter have to comply with reverse charge provisions.

Hope it is clear

MADDIRALA SUNIL KUMAR

ACCOUNTANT

27 Points Joined January 2011

thank u for u reply i need some clarity on reverse charge provison on transport.explan with example,who will come under reverse charge either supplier or recevier or transporter..supplier paying amount on behalf of receiver and adding freight amount in invoice to reciver.