Debit note issued for freight charges by buyer

This query is : Resolved

HITLER (Querist)
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10 April 2021 Respected Sir,
As regarding above subject , My query is that one of our buyer has issued a debit note of freight charges on export shunt on us with nit gst, is it valid or not or he has to charge gst on freight charges on export shunting.Please reply

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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06 July 2024 If your buyer has issued a debit note for freight charges related to export shipments, and they have not charged GST on these freight charges, the validity and GST applicability depend on specific GST rules regarding exports. Here’s how it typically works:

1. **Export of Goods or Services:**
- According to GST rules, exports of goods or services are considered as zero-rated supplies. This means that GST is not charged on exports.
- Freight charges related to the export of goods are typically zero-rated as well, provided certain conditions are met.

2. **GST on Freight Charges:**
- If the freight charges are directly related to the export of goods (like shipping goods outside India), and the necessary conditions for zero-rated supplies are fulfilled, GST should not be charged on these freight charges.
- Therefore, if your buyer has issued a debit note for freight charges related to such zero-rated exports, they should not charge GST on these freight charges.

3. **Documentation and Compliance:**
- It’s important to ensure that the debit note clearly specifies that the freight charges are for export shipments and that they are zero-rated for GST purposes.
- Both parties should maintain proper documentation to support the zero-rated nature of the transaction, such as export invoices, shipping documents, and the debit note itself.

4. **Verification:**
- Verify with your GST consultant or accountant to ensure that all conditions for zero-rated exports are met and that the treatment of freight charges aligns with GST regulations.
- If there are any doubts or specific circumstances, consulting with a GST expert would be advisable to avoid any compliance issues.

In summary, if the debit note issued by your buyer relates to freight charges for export shipments and complies with zero-rated GST requirements, they should not charge GST on these freight charges. However, specific details and conditions should be verified based on the exact nature of the transaction and applicable GST rules.