Expenses & liabilities included in gst invoice

This query is : Resolved

Rakesh Sharma (Querist)
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28 August 2017 Dear Sir,

We have made Tax invoice by giving below details :-

1) Item (GST Rate is 18%)
- Add : Freight
- Add : Packing Charges
- Add : TCS @1%
- Total Value included above Expenses & TCS
- Add : GST 18% on above all
- Grand Total

Is the above calculation is correct?

Please guide me.

Regards,

Rakesh Sharma

Lalit Kumar

Lalit Kumar (Expert)
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28 August 2017 The above calculation is correct, as the product cost will include freight charges,packing charges and tcs to be charged on transaction value, GST to be calculated thereon (inclusive of all the above charges)

I have presumed you are an E commerce player since there is a TCS component and hence section 52 of CGST Act will apply which states net value of taxable supplies to be considered.

Rakesh Sharma

Rakesh Sharma (Querist)
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29 August 2017 no sir, we have sold scrap

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CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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07 September 2017 Expense list under GST https://www.caclubindia.com/share_files/details.asp?mod_id=74125

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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24 July 2024 It seems like you're asking about the correct calculation and components of a tax invoice for a sale involving GST, freight charges, packing charges, and TCS (Tax Collected at Source). Let's break down the components and verify the calculation step by step:

### Components of the Tax Invoice:

1. **Item Details (GST Rate 18%)**: This represents the taxable value of the main item being sold, on which GST at 18% will be applied.

2. **Additional Charges and TCS**:
- **Freight**: Charges for transporting the goods.
- **Packing Charges**: Charges for packaging the goods.
- **TCS @1%**: Tax Collected at Source, which is deducted at source on certain specified transactions.

3. **Total Value Including Expenses and TCS**: This is the sum of the item value, freight, packing charges, and TCS.

4. **GST Calculation**:
- **GST 18% on Total**: Calculate GST at 18% on the total value (item value + freight + packing charges + TCS).

5. **Grand Total**: Sum of the Total Value Including Expenses and TCS and the GST amount.

### Verification of Calculation:

To ensure correctness, let’s verify the calculation assuming the total taxable value before GST is Rs. X:

- **Taxable Value (X)**: This is the value of the item before adding freight, packing charges, and TCS.

- **Total Value Including Expenses and TCS**: X + Freight + Packing Charges + TCS

- **GST Calculation**:
- GST Amount = (X + Freight + Packing Charges + TCS) * 18%

- **Grand Total**:
- Grand Total = (X + Freight + Packing Charges + TCS) + GST Amount

### Example Calculation:

Let’s assume:
- Item Value (X) = Rs. 10,000
- Freight = Rs. 1,000
- Packing Charges = Rs. 500
- TCS @1% = Rs. 100 (1% of X)

**Step-by-Step Calculation**:
1. Total Value Including Expenses and TCS = Rs. 10,000 (Item Value) + Rs. 1,000 (Freight) + Rs. 500 (Packing Charges) + Rs. 100 (TCS) = Rs. 11,600

2. GST Calculation:
- GST Amount = Rs. 11,600 * 18% = Rs. 2,088

3. Grand Total:
- Grand Total = Rs. 11,600 (Total Value Including Expenses and TCS) + Rs. 2,088 (GST Amount) = Rs. 13,688

### Conclusion:

Based on the above breakdown, if your tax invoice is structured as described, the calculation appears to be correct. Ensure that all components are clearly specified on the invoice, including the breakdown of item value, additional charges (freight, packing charges), TCS, and GST. This clarity will help in compliance with GST regulations and facilitate smooth transactions between you and your customers. If you have specific doubts or if the nature of your business involves complex transactions, consulting with a tax advisor or GST expert would be beneficial for accurate compliance and record-keeping.