Freight charge in invoice as per gst

Some of our vendors are chargeing freight on invoice and charging gst on base value ie. item value+freight amount @ 18% is it wrong or right as i had read about the GST , they mentioned that in short item value+freight value and or any cost that occurs on receiving of goods from supplier will be called value of supply and should be added on invoice.

Your vendors are doing it right. Any cost occured before or during supply of goods and which is added in invoice, is added in the taxable value and the gst rate is applicable as that of the primary supply.

as the concept is GST allows to include in your cost of goods and charge accordingly the rates and recovery is combined.

You need not show separately since transportation is also considered as supply chain process cost and to be included in the basic

If you show separately then the receiver shall to pay RCM which normally the buyer may not be interested

All are saying 5% GST paid on transport will be credited in full. But my question is how will it be credited? Against what? 

If i transport goods and pay GST at RCM of 5%, thats ok.

However when i sell goods to my customers i collect transportation GST at 18% as my goods are charged at 18% !

So question arises, against what will 5% GST RCM i paid be deducted? Will it be against 18% i collect from customers?

Lets understand this in 2 parts... A) You pay freight to transporter... Then u will have to enter it manually in prepopulated GSTR-2 by ur suppliers entries ..yes GSTR-2...show ur 5% gst (fixed for services from GTA) AND mark it as Reverse charge in the same GSTR-2. Since gst on freight for business supplies are eligible for ITC, you wont have to pay any Gst on the freight paid, AS YOU WILL GET FULL ITC REFUND.

B) Now in your sale invoice you have to add actual freight only and this will be treated as value addition to ur supplies . This combined invoice value will be charged with Gst rate same as that of ur principle goods. your customer will get ITC of this gst with gst on value of goods received.

Lets understand this in 2 parts... A) You pay freight to transporter... Then u enter it manually in prepopulated GSTR-2 by ur suppliers entries ..yes GSTR-2...show ur 5% gst (fixed for services feom GTA) AND mark it as Reverse charge in the same GSTR-2. Since gst on freight for business supplies are eligible for ITC, you wont have to pay any Gst on the freight paid, AS YOU WILL GET FULL ITC REFUND. B) Now in your sale invoice you have to add actual freight only and this will be treated as value addition to ur supplies . This combined invoice value will be charged with Gst rate same as that of ur principle goods. your customer will get ITC of this gst with gst on value of goods received.

Means 5% RCM GST cancels out against 18% GST?

No ...ur 5% gst thru RCM is eventually refunded as ITC. And 18% gst that u will charge in invoice will be refunded to ur buyers as ITC, provided he is a registered dealer. U will have to pay this 18% gst, recd on freight component, along with other gst , in ur GSTR 1

What if goods in the invoice are of different rates ( 0% and 5%) and transportation charges is included in invoice?

Rate of Gst on transportation charges?

The highest rate of GST, among the goods supplied, will be applicable.

Client has mention in the sale invoice separately delivery charges is there is any GST applicability on this amount ,please clarfiy

Treat freight just like any other service in invoice, for example repair, on repair you charge rate that is applicable to repair services and not rate of product or machinery that is also included in the invoice... similarly freight will be charged at 5% irrespective of rate of other product in invoice. And if someone charged higher rate on freight, you will get input credit and liability of submitting gst on freight lies on the person who charged it on invoice, but by this procedure gst will be double taxed.. once assume 18% as composite invoice which will be charged on consumer and paid to govt. and again as separate service of freight which will attract reverse charge and 5 % need to be paid to govt when freight bill is raised by the transporter... So prudently either charge nothing on freight on invoice or charge 5%.

Hello,

I want to know whether the refund o GST- ITC?

If yes kindly share me the any URL & or any notification issued by the department.

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Thanks in advance.

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Originally posted by : Sumit sain
	Client has mention in the sale invoice separately delivery charges is there is any GST applicability on this amount ,please clarfiy

In my opinion, delivery charges charged separately in invoice is a part of value of goods and GST is payable on value including delivery charges. This is a case of composite supply and the rate is same as applicable to goods.

When you treat two separate products in invoice as different products and apply different rates or machinery and it's repair as sale of different product and a service and apply different rate of machine and on repair, similarly freight is a different service which has its unique identity and have different gst rate.. composite invoice appears wrong treatment as it's sale of a product and sale of service.. just like machine and it's installation or repairing charges.