PLEASE GUIDE ME ONE OF MY CLIENT IS DOING WOOD PLAINING WORKS AND ALSO PROVIDE CONTRACT SERVICES MEANS PURCHASE TIMBER WOOD CUT AND PLAIN THE WOOD SELL TO THE CUSTOMER IN THIS SITUATION HE IS PROVIDING SALES AND SERVICES ALSO.
MY QUERY IS HOW TO BILL TO THE CUSTOMER BECAUSE BOTH SUPPLY AND SERVICES. WHAT IS SAC CODE AND GST FOR WOOD PLAINING WORKS WHAT IS HSN CODE FOR TIMBER WOOD IS COMPOSITE TAX WILL APPLY FOR IN THIS SITUATION OR TO MAKE BILL BOTH SERVICE CHARGES AND SUPPLY OF GOODS SEPERATELY OF INCLUDING BOTH
09 July 2024
In your client's case, where they are engaged in both supply of goods (timber wood) and provision of services (wood planing works), here's how you can approach billing, SAC codes, GST rates, and whether composite tax (GST) applies:
### Billing to the Customer:
1. **Separate Billing for Goods and Services**: - Since your client is involved in both supply (timber wood) and services (wood planing), it's advisable to issue separate invoices for: - **Supply of Goods (Timber Wood)**: Mention HSN code and GST applicable for timber wood. - **Supply of Services (Wood Planing Works)**: Mention SAC code and GST applicable for wood planing services.
2. **Composite Supply Consideration**: - Composite supply under GST occurs when goods and services are supplied together as a single supply but are naturally bundled. - If your client offers a single price for both timber wood and wood planing works and they are naturally bundled (where one is essential to the other), then it may qualify as a composite supply. - However, if they are distinct supplies where customers can purchase wood separately from wood planing services, it's better to issue separate invoices.
### Details Required:
- **HSN Code for Timber Wood**: The HSN code for timber wood can vary based on the type and specifics of the wood. Common HSN codes include 4403 for Wood in the rough, 4407 for Sawn wood, etc. The exact HSN code depends on the specific type of timber wood being supplied.
- **SAC Code for Wood Planing Works**: The SAC (Services Accounting Code) for wood planing works would typically fall under codes related to processing and treatment of wood. For instance, SAC code 998832 covers Wood processing and preservation services.
### GST Rates:
- **GST Rate for Timber Wood**: Generally, timber wood attracts GST at rates ranging from 12% to 18% depending on the type and specifications. Check the GST rate applicable for the specific type of timber wood being supplied.
- **GST Rate for Wood Planing Works**: Wood planing services are classified under services and are subject to GST at the rate of 18%.
### Composite Tax (GST):
- **Composite Tax**: If your client's supply of goods and services qualifies as a composite supply (naturally bundled and supplied together), they can opt to apply a single rate of GST on the entire supply. - Ensure that the components of the supply are indeed naturally bundled, and the price charged represents the entire supply.
### Conclusion:
To bill your customer effectively: - Determine whether the supply of goods and services should be treated separately or as a composite supply based on how they are offered to customers. - Use appropriate HSN codes for timber wood and SAC codes for wood planing works. - Apply the correct GST rates for both goods (timber wood) and services (wood planing). - Ensure compliance with GST rules and guidelines regarding composite supply if applicable.
If you're uncertain about any specific details or classifications, consulting with a tax professional or GST consultant would be beneficial to ensure accurate invoicing and compliance with GST regulations.
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