Gst on freight

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2017 Mr X is dealer (Prop.) has purchase material from out Mumbai and he paid freight charges to Jaipur Golden Transport co., Om Logistics Ltd etc

Is GST liable on freight payment to Jaipur Golden Transport co., Om Logistics Ltd

If Yes what is the rate?

Is TDS also apply?

Kindly reply on urgent.

CA. Vinodh Kothari

CA. Vinodh Kothari (Expert)
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12 August 2017 GST on Freight is 5% Reverse Charge Mechanism.

TDS to be deducted at 1% / 2 % depending on type of GTA

VK

Querist : Anonymous

Querist : Anonymous (Querist)

14 August 2017 If have to pay Insurance of car used in business does it attract gst. If yes what is the rate of tax.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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27 July 2024 Yes, the insurance premium paid for a car used in business does attract GST. Here’s a detailed breakdown:

### 1. **GST on Insurance Premium for Business Vehicles**

**Taxable Event:**
- Insurance services are taxable under GST when provided by insurance companies, and this applies to insurance premiums for vehicles used in business.

**Applicable GST Rate:**
- **Standard Rate:** The GST rate applicable on insurance services is **18%**. This rate includes both Central GST (CGST) and State GST (SGST) or Integrated GST (IGST), depending on whether the insurance service is provided within a state or across states.

### 2. **Input Tax Credit (ITC) on Insurance Premium**

**Eligibility for ITC:**
- **ITC Claim:** If the vehicle is used for business purposes, you can claim Input Tax Credit (ITC) on the GST paid on the insurance premium.
- **Conditions:** To claim ITC, ensure that:
- The insurance is for a vehicle used in the course or furtherance of business.
- The insurance invoice contains all necessary details and complies with GST rules.
- The ITC claim is reflected in your GST returns, specifically in GSTR-3B and GSTR-1.

**Reference:**
- **Section 16 of the CGST Act, 2017:** Governs the eligibility and conditions for claiming ITC.

### 3. **Accounting Entries**

**Example:**

- **Insurance Premium:** ₹10K
- **GST Rate:** 18%
- **GST Amount:** ₹10K × 18% = ₹1,800
- **Total Amount:** ₹10K + ₹1,800 = ₹11,800

**Accounting Entries:**
- **Debit**: Insurance Expense ₹10K
- **Debit**: GST Input Credit ₹1,800
- **Credit**: Bank/Cash ₹11,800

### 4. **Procedure for Payment and Claiming ITC**

1. **Payment:**
- **Invoice:** Obtain a GST-compliant invoice from the insurance company.
- **Payment:** Pay the insurance premium along with GST.

2. **Filing GST Returns:**
- **GSTR-1:** Report the insurance premium and GST paid.
- **GSTR-3B:** Claim ITC for the GST paid on insurance.

### Summary

1. **GST Rate:** 18% on insurance premiums for business vehicles.
2. **ITC:** Available if the vehicle is used for business purposes.
3. **Documentation:** Ensure GST-compliant invoices and proper recording in accounting books.

For any specific questions or unique situations, consulting with a GST professional or tax advisor is advisable to ensure compliance and optimize tax management.