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Delivery charges appearing on invoice

30 October 2022

what is the accounting treatment for delivery charges appearing on invoice of inventory purchased
suppose inventory worth rs 60 lac and delivery charges are 10 thousand and invoice is showing 60.10lac how it is recorded
does it is recorded sepreately in purchase a/c and freight inward a/c

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9 Replies

Yasaswi Gomes new (Finance ) (4492 Points)
Replied 30 October 2022

Yes. It can be recorded in purchases and frieght inward a\c.

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Atharv Sankliya (1323 Points)
Replied 30 October 2022

Is it ok
because there is no separate invoice for delivery
the firm have combined invoice for audit purpose

Yasaswi Gomes new (Finance ) (4492 Points)
Replied 30 October 2022

I forgot configuration in tally. Freight inwards has a hsn code this means gst is applicable on the recipient. So they need an account for that to calculate and offset input and output taxes. Technically, invoice act must be adhered to. If delivery charges are not mentioned get it amended. But it doesnt make any difference if your working on a software because configurations must have been set.

Yasaswi Gomes new (Finance ) (4492 Points)
Replied 30 October 2022

Ive gone through the tha tax invoice and it doesnt mention any freight at all! These tax people create problems to everyone. But HSN must be mentioned and tax must be mentioned. I think the shop owners will get tired to calculate 2 gst rates. So its all consolidated and your good to go when there is no descripttion needed.

Attached File : 3176554 20221030173625 tax invoice and other 1 .pdf downloaded: 35 times

Atharv Sankliya (1323 Points)
Replied 30 October 2022

My query is does this combined invoice can be used for audit?

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Yasaswi Gomes new (Finance ) (4492 Points)
Replied 30 October 2022

Audit needs evidence. Its the chance an auditor can take. Audit thresholf suggests 3% errors permissable but im not sure about indian threshold. This is not an error but still you need an evidence. But if it is a practice that no need to include freight charges as the performance obligation covers it, then yes its good for auditing.

Sas Vajjala (12 Points)
Replied 31 October 2022

I think it comes under composite supply. So, no separate invoice is needed and tax rate can be rate charged for principal supply.

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sabyasachi mukherjee (27117 Points)
Replied 31 October 2022

Not composite supply.

Sastry Vajjala (7 Points)
Replied 31 October 2022

Just for clarification, You cannot conclude that this is not composite supply. When supplier is providing transportation also, it will be a composite supply and tax rate will be the rate of principal supply.

1 Like