treatment of transportation charges included in invoice in case of supply of goods.

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Bhu J

12 Points Posted on 24 November 2018

Mr.A supplies goods to Mr.B value -10000 ,GST @ 5%
material is delivered to Mr.B premises by a truck owned by Mr.C
transportation cost-1500 gst 12%
Invoice raised by A to B of 11500 , amount collected from B 11500 and 1500 is paid to Mr.C by Mr.A

now my question is
1) whether such freight is a part of supply, if yes then what gst rate applicable?

2) if mr.C is not a GTA, then the service of transportation will be exempt, if such supply is except, then do we still freight to value of supply

3) in the problem, who will be recipient of transportation service and who will be supplier between A &B and A,&C

4)how can we avoid this addition in value because of freight?

Replies (7)

RAJA P M

"Do the Right Thing...!!!"

128152 Points Posted on 24 November 2018

1. yes. If it's shown in the Invoice. GST rate beard on Supply of Goods rate which is highest tax rate applicable for the freight.

2. Yes... The "Transportation of Road" is exempt when it's not including in Invoices by the supplier.

3. Mr. B is recipient of service from Mr A. (and Mr A is recipient of Service from Mr. C. if C is billing to A)

4. Better to tie up Mr B to Mr C directly without add the Freight value in invoice.

Bhu J

12 Points Posted on 24 November 2018

in the answer provided by you in point 1.
I guess the concept of composite supply will be applicable and whole invoice value will be taxed @ 5%, (rate on goods supplied),

for point 4.
yes that will be the solution, we can follow it onwards, but what can we do for the invoices issued in previous month's and freight included in the value !
can we issue a credit note now for same ?

RAJA P M

"Do the Right Thing...!!!"

128152 Points Posted on 24 November 2018

Originally posted by : Bhu J

in the answer provided by you in point 1.I guess the concept of composite supply will be applicable and whole invoice value will be taxed @ 5%, (rate on goods supplied),

- Yes... 5% is applicable.

for point 4.yes that will be the solution, we can follow it onwards, but what can we do for the invoices issued in previous month's and freight included in the value ! can we issue a credit note now for same ?

- If not shown separately then no need.

pravin

Jr. Accountant

212 Points Posted on 27 November 2018

1. Material Supply to Customer through Tax invoice :

Customer - Place of Supply ( Maharashtra )

Supplier - Manufacturer ( Madhya Pradesh )

Tax Liability - IGST Charged on Invoice

2. Material Supply by Transporter ( GTA )

Transporter (GTA ) Locate in M.P ( May be Registered / URD )

Pls. confirm the liability of Tax under RCM on supplier locate in M.P

is it IGST or CGST & SGST

Thanks

Regards

Pravin

Bhu J

12 Points Posted on 27 November 2018

pravin,
is the goods sent to maharashtra ? the customer a registered one ? if yes then it will be a igst
if the customer is not registered then it will be intra state supply and cgst+sgst to levy

pravin

Jr. Accountant

212 Points Posted on 27 November 2018

Sir

As Supply point of Tax apply IGST - its correct , we are charging IGST on Tax Invioce . point is cleared.

But i have confused on GTA Services, what is the tax liability IGST or CGST & SGST.

Alagappan Kannan

2 Points Posted on 22 April 2019

A manufacturer can issue invoice for both supply of materials and services rendered by them? For ex. "A" - is a Manufacturer who sell goods to "B" and raises bill for supply of Goods in the name of "B" and charging GST @ 12%. For supply of Goods to "B" , " A" is using his Own Vehicle for which "A" has to collect freight from "B". "B" Wants separate bill for Freight and they don't want to show the freight value in bill of supply of goods. My question is, Whether "A" can raise bill for Freight in the name of "B" for supply of GTA services and what would be GST%.? whether "A" can maintain GST Invoice Sl Nos separatley for Supply of Goods and supply of GTA Servcies? Kindly genius please clarify.