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Gst on lorry freight paid

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venkatesan

business

47 Points Posted on 02 August 2022

I am dealing in waste paper and supplying to paper mills. the price is inclusive of freight charges. I am paying the lorry freight. Since the price is inclusive of freight charges and gst charged for price including the freight, do i have to pay GST for the freight amount under RCM and get input?

Replies (3)

Quick Summary

This discussion clarifies GST implications for businesses involved in waste paper supply where freight charges are included in the sale price. The user pays the lorry freight directly and is asking about Reverse Charge Mechanism (RCM) applicability and input tax credit. The consensus is that if the transporter invoices the user, and the user recovers the cost from the paper mill, GST under RCM is payable on the freight, and input tax credit is eligible.

CA. ANKIT PANDYA

292 Points Posted on 02 August 2022

As I Understand from your wordings, Transporter is raising invoice on you and you are recovering the cost of transport from the paper mills whom you supply the waste paper.

since you are paying the freight, you have to pay the GST under RCM and you are also eligible to take the credit against the same.