Freight charges
This query is : Resolved
02 August 2017
Dear Sir/Madam,
We had supplied FG to customer and charged freight ₹ 15000/-from customer in invoice accordignly we paid GST on total invoice amount.
Now Transporter (GTA) is came for payment of freight with LR.We paid the freight to transporter and deposit GST in reverse charge and avail ITC.
This would double taxation on freight, i. at the time of supply and at the time of payment to GTA.
Fyrther ITC is also not available to us for GST paid on freight in invoice.
Kindly suggest how to bill so that ITC should be eligible without double tax on freight.
We had supplied FG to customer and charged freight ₹ 15000/-from customer in invoice accordignly we paid GST on total invoice amount.
Now Transporter (GTA) is came for payment of freight with LR.We paid the freight to transporter and deposit GST in reverse charge and avail ITC.
This would double taxation on freight, i. at the time of supply and at the time of payment to GTA.
Fyrther ITC is also not available to us for GST paid on freight in invoice.
Kindly suggest how to bill so that ITC should be eligible without double tax on freight.
02 August 2017
if you have charged FREIGHT in the invoice, your case does NOT fall under RCM. Because what you are doing is paying the transporter on behalf of your customer.
02 August 2017
But is customer Directly pays he need pay at 5% RCM. Suppose if items are taxed in invoice under 18% than the GST on Transport will be at 18%???
02 August 2017
which side your are representing?
02 August 2017
I want clarification from both side.
02 August 2017
Oh, you are research fellow.......... Then there is a third dimension also. Please dont forget that. It is very important......i.e. Govt Consider that angle as well.
Now so far as your query is concerned, it will be the choice/negotiations between the buyer and seller whether to include transport in invoice or pay separately.... In real life it so happens that say for example.... Belgaum person goes to Surat for textile purchase. He hardly knows any transporter at Surat. So he would like to rely on the skill of the seller so far as the transporter is concerned. At the most what you can say is the "trade off" needs to be considered by the buyer while arriving at the decision as to whether or not ask the seller to load transport charges in the bill/invoice OR go by RCM. What is your view?
Now so far as your query is concerned, it will be the choice/negotiations between the buyer and seller whether to include transport in invoice or pay separately.... In real life it so happens that say for example.... Belgaum person goes to Surat for textile purchase. He hardly knows any transporter at Surat. So he would like to rely on the skill of the seller so far as the transporter is concerned. At the most what you can say is the "trade off" needs to be considered by the buyer while arriving at the decision as to whether or not ask the seller to load transport charges in the bill/invoice OR go by RCM. What is your view?
02 August 2017
Sir, If the my items are charges at 18% i need to charge the tax at 18% on freight charges as well. Is it better to ask customer to arrange the freight by himself and pay under RCM @ 5%. we will arrange transport for him but invoice and payment will be on customer name. But there is no clarification wheter if i inculde the freight charge in invoice i need not pay under RCM when actual LR copy or invoice raise by transpoter. It is very difficult to track as well.
02 August 2017
When GST is paid by the buyer through his/her input supply, the RCM does NOT come into play.
I am NOT getting which string of the GST Act you want to STRETCH?
At the most it could be the question of whether or not the buyer, on account of financial as well as non financial considerations wants to pay it through input supplies OR RCM.
I am NOT getting which string of the GST Act you want to STRETCH?
At the most it could be the question of whether or not the buyer, on account of financial as well as non financial considerations wants to pay it through input supplies OR RCM.
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