Freight, packing & forwarding charges in tax invoice

This query is : Resolved

Rakesh Sharma (Querist)
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07 July 2017 Good Evening everybody,

We are registered dealer & rate of GST of our ITEM is 28%. As per parties requirements, we pack material & charge freight on invoice as shown below :-

Item Value 80,000/- GST @28%
Freight 4,000/- GST?
Packing & Forwarding Charges : 5,000/- GST?

Sir, what will be GST rate on freight & packing & forwarding charges?

Please advise me, I am in big confusion. I can't see any idea.

Please Sir,

Regards,

Rakesh Sharma

Rakesh Sharma

Rakesh Sharma (Querist)
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08 July 2017 please experts, reply my query.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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25 July 2024 Good evening,

In GST (Goods and Services Tax) regime, the tax treatment of freight, packing, and forwarding charges depends on whether these charges are separately mentioned and whether they are incurred as part of the supply of goods or services. Here’s a breakdown of how GST applies to each component:

1. **Freight Charges:**
- If freight charges are separately mentioned on the invoice and are incurred as part of the supply of goods, they are considered part of the value of supply of goods.
- Since your item attracts GST at 28%, the same rate of 28% would apply to the freight charges if they are part of the supply of goods.
- Therefore, GST on freight charges of Rs. 4,000 would be calculated as:
\[
GST\ amount = \frac{28}{100} \times 4000 = 1120
\]
So, the GST amount on freight would be Rs. 1,120.

2. **Packing & Forwarding Charges:**
- Packing and forwarding charges are typically considered as incidental charges related to the supply of goods.
- If these charges are separately mentioned and are part of the supply of goods, they would also attract GST at 28%.
- GST on packing and forwarding charges of Rs. 5,000 would be calculated as:
\[
GST\ amount = \frac{28}{100} \times 5000 = 1400
\]
So, the GST amount on packing and forwarding charges would be Rs. 1,400.

Therefore, to summarize:
- GST on Freight (Rs. 4,000) = Rs. 1,120
- GST on Packing & Forwarding Charges (Rs. 5,000) = Rs. 1,400

Ensure that these charges are separately mentioned on the tax invoice and are clearly shown as part of the supply of goods to comply with GST regulations. If there are any specific exemptions or notifications applicable to your goods or services, you may need to consider those as well. Always consult with a GST professional or refer to the latest GST guidelines for accurate compliance.

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