ABC: A GST registered Firm sell the goods Rs. 240000+GST 18% to XYZ and incurred Rs.85,000/- towards freight charges of a client XYZ paid to GTA VIP
Ltd . But XYZ reimbursed Rs.85,000/- to ABC towards Freight charges.
1.GST is applicable on freight charges , from the angle of ABC ? At what rate?
2.it is treated as composite supply?
3.who will liable to pay reverse charge ABC or XYZ?
Kindly provide answer in detail , with applicable sections....
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GST on Frieght query
Replies (1)
1. yes gst applicable on freight charges at the same rate applicable on goods.
2. In my opinion it may not be a composite supply since you are not providing transportation services
you are simply collecting the expenses you incurred
so there is only one supply and freight charges are included in value of supply and taxable at the same rate of supply of goods.
3. Since ABC LTD i.e. supplier is receiving GTA services. So ABC ltd need to pay rcm.
2. In my opinion it may not be a composite supply since you are not providing transportation services
you are simply collecting the expenses you incurred
so there is only one supply and freight charges are included in value of supply and taxable at the same rate of supply of goods.
3. Since ABC LTD i.e. supplier is receiving GTA services. So ABC ltd need to pay rcm.
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