Should GST be charged on freight charged in a tax invoice

Page no : 2

E.KALAIKOVAN (Sr. Accounts Manager ) (344 Points)
Replied 04 July 2017

Transpsort of goods by Roadways is only coming under the RCM

Transport of Goods by Railways, Waterways and Airways, the Service provider has to charge GST @ 5%

If the Transport of goods by Train in container then the Rate of Tax is 12%

 

In the Transpsort of goods in Roadways, GST is to be paid by the Receiver. It is the liability of the Service Receiver. The Service provider need not to charge GST. If the Service provider and Service receiver are companies, then the SP can charge GST on Roadways. No input Tax credit in GTA  

Rohan (Account Assistant Manager)   (29 Points)
Replied 04 July 2017

In GST there are same provision which are mentioned in VAT. so if freight & other charges u rocover from your consumer u have to show it in your invoice & on that charges u have to charge GST. Suppose u are selling goods of 5 % & 12% in same invoice then as per the provision of GST , Mix supply of provision liable & in such cash GST on Freight & other charges should be charged @ 12% as the higher rate of supply (apply in case of mix supply).

1 Like

Karan kapoor (Professional) (88 Points)
Replied 04 July 2017

Tax paid on reverse charge basis will be available for input tax credit if such goods and/or services are used, or will be used, for business. The service recepient (i.e., who pays reverse tax) can avail input tax credit

Hetal Patel (Author) (117 Points)
Replied 04 July 2017

You may check full details of GST Rate on CACraker page. There are different kinds of post there related to GST.


Darshan (service) (43 Points)
Replied 04 July 2017

Dear Sir,

 

Earlier Service Tax 15 % claimed  Total Transportation Charges on @ 30%. IN GST 5%  paid for total Tansporation charges .

 

Regards


Jayant Bothra (Tax Advisor & Consultant)   (511 Points)
Replied 04 July 2017

Hello All... Please refer to point 47 in tweet FAQ. In point 47 the department clarified that freight charged on the invoice in taxable under GST.


Attached File : 348395 20170704190700 tweet faq.pdf downloaded: 480 times
1 Like

RAJA P M ("Do the Right Thing...!!!")   (128111 Points)
Replied 04 July 2017

Originally posted by : Jayant Bothra
Hello All... Please refer to point 47 in tweet FAQ. In point 47 the department clarified that freight charged on the invoice in taxable under GST.

Dear Jayant Bothra.,

Finally You are stopped this discusion... Well said and i like it


Karan kapoor (Professional) (88 Points)
Replied 04 July 2017

Even I was also referring to the same fact but in a simplified manner.

CA Rashmi Gandhi (Chartered Accountant) (86500 Points)
Replied 04 July 2017

Earlier i also check that but in one more question about gst on transportation it is written that refer Sec15.

There is nothing like that in GST.

Karan kapoor (Professional) (88 Points)
Replied 04 July 2017

Absolutely right mam we all are confused in one or more provisions and applicability regarding GST right now but clarity will improve as the time goes on

CA Rashmi Gandhi (Chartered Accountant) (86500 Points)
Replied 04 July 2017

Yes but as per my opinion no GST charged on freight.
1 Like

ASHISH DEORAH (director) (24 Points)
Replied 05 July 2017

deear sir, 

 i am an manufacturer i get orders on FOR basis and if goods are supplied on FOR basis, then how should the billing be done. . 

1. total rate including freight and then charge 5% or 18% as applicable on different products on the total value 

2. mateerial value charged at 5% or 18% as applicable on different products and adding freight charges with 18% tax?

 

 


Vipul Maheshwari (Goods and Services Tax Consultant)   (208 Points)
Replied 05 July 2017

In your case

1) If freight is charged along with goods value then it is treated as composite supply

2) GST will be payable at the rate applicable to pricipal supply that is goods in your case 

3) Its better to make separate invoice for freight and pay GST under reverse charge at the rate applicable to freight

4) Rate of freight is diifferent for different modes of transportataion.

5) Input tax credit of GST paid under reverse charge is available

1 Like

Piyush Nagda (Proprietor) (27 Points)
Replied 05 July 2017

Section 15 : “Value of Taxable Supply” (CGST Act, 2017)

Provisions under Section 15 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Value of Taxable Supply”, are as under:

 

(1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply.

(2) The value of supply shall include–

(a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier;

(b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both;

(c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services;

(d) interest or late fee or penalty for delayed payment of any consideration for any supply; and

(e) subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments.

Explanation: For the purposes of this sub-section, the amount of subsidy shall be included in the value of supply of the supplier who receives the subsidy.

(3) The value of the supply shall not include any discount which is given–

(a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and

(b) after the supply has been effected, if—

(i) such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and

(ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply.

(4) Where the value of the supply of goods or services or both cannot be determined under sub-section (1), the same shall be determined in such manner as may be prescribed.

(5) Notwithstanding anything contained in sub-section (1) or sub-section (4), the value of such supplies as may be notified by the Government on the recommendations of the Council shall be determined in such manner as may be prescribed.

Explanation: For the purposes of this Act,–

(a) persons shall be deemed to be “related persons” if–

(i) such persons are officers or directors of one another’s businesses;

(ii) such persons are legally recognised partners in business;

(iii) such persons are employer and employee;

(iv) any person directly or indirectly owns, controls or holds twenty-five per cent. or more of the outstanding voting stock or shares of both of them;

(v) one of them directly or indirectly controls the other;

(vi) both of them are directly or indirectly controlled by a third person;

(vii) together they directly or indirectly control a third person; or

(viii) they are members of the same family;

(b) the term “person” also includes legal persons;

(c) persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related.


ASHISH DEORAH (director) (24 Points)
Replied 05 July 2017

Section 15 : “Value of Taxable Supply” (CGST Act, 2017) Provisions under Section 15 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Value of Taxable Supply”, are as under: (1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. (2) The value of supply shall include– (a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier; (b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both; (c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; (d) interest or late fee or penalty for delayed payment of any consideration for any supply; and (e) subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments. Explanation: For the purposes of this sub-section, the amount of subsidy shall be included in the value of supply of the supplier who receives the subsidy. (3) The value of the supply shall not include any discount which is given– (a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and (b) after the supply has been effected, if— (i) such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and (ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply. (4) Where the value of the supply of goods or services or both cannot be determined under sub-section (1), the same shall be determined in such manner as may be prescribed. (5) Notwithstanding anything contained in sub-section (1) or sub-section (4), the value of such supplies as may be notified by the Government on the recommendations of the Council shall be determined in such manner as may be prescribed. Explanation: For the purposes of this Act,– (a) persons shall be deemed to be “related persons” if– (i) such persons are officers or directors of one another’s businesses; (ii) such persons are legally recognised partners in business; (iii) such persons are employer and employee; (iv) any person directly or indirectly owns, controls or holds twenty-five per cent. or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family; (b) the term “person” also includes legal persons; (c) persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related. SIR, I AM A LAYMAN AND WOULD REQUEST YOU TO KINDLY EXPLAIN THIS IN SIMPLE TERMS IF POSSIBLE.


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