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Freight charges in books of account

pradip (business) (48 Points)

16 May 2018

WE HAVE CHARGED FREIGHT ON SALE BILL AND ALSO CHARGED GST ON IT. BUT IN BOOKS OF ACCOUNT WE SHOWN THE FREIGHT AMOUNT CLUBBED WITH SALE FIGURE. IS IT CORRECT ACCOUNTING. PLESAE CLEARIFY.

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10 Replies

Shubham Singhania (Student CA Final ) (293 Points)
Replied 16 May 2018

it is an example of Composite Supply.
both the element to b shown separately in BOA.
Freight amount not to b clubbed in sales figure if transportation service takes from outside.
well more clarification is required in question.

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pradip (business) (48 Points)
Replied 16 May 2018

WE HAVE OWN COMPANY VEHICLE. AND SOMETIMES WE SEND THRU COURIER, AND COURIER AGENCY PROVIDE US THE BILL.

prasad Nilugal ( GST Practitioner & Accounts ) (14805 Points)
Replied 16 May 2018

You have to show separte amount of fright charges , can not clubbed with sales in the books of accounts , however you have to calculate gst on both , (sales + fright charges ) .

Take fright charges ledger account under indrect expense

Shubham Singhania (Student CA Final ) (293 Points)
Replied 16 May 2018

agreed with prasad...
well u can claim itc on such vehicle as well

Nirmala Hambar (3 Points)
Replied 16 May 2018

Hsn code for Freight charges

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prasad Nilugal ( GST Practitioner & Accounts ) (14805 Points)
Replied 16 May 2018

fright charges is service , so it is having SAC code not HSN code . please confirm with others also

Group 99651		Land transport services of Goods
	996511	Road transport services of Goods including letters, parcels, live animals, household & office furniture, containers etc by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles.
	996512	Railway transport services of Goods including letters, parcels, live animals, household & office furniture, intermodal containers, bulk cargo etc
	996513	Transport services of petroleum & natural gas, water, sewerage and other goods via pipeline
	996519	Other land transport services of go

harsh (Business) (105 Points)
Replied 16 May 2018

We deliver goods to our party at their factory. The invoice doesn't mention frieght as we have to pay for freight.. we have to take builty to make insurance cover while transit. Will it be exempt under ' services by way of transportation' or we need to pay 5percent RCM as we took builty

Vikas Acharya (System Administrator) (87 Points)
Replied 18 May 2018

Freight charges is part of valuation of outward supply If your sales term is freight paid basis and accordingly GST will levied on whole transaction(invoice) value including freight value. HSN code will be the same applicable on product. There is no question of ITC on freight as this is include in value of outward supply.

You may club freight with sales or shown separately in bill depend upon the price negotiated with customer.

You can show in books it under sales group.

Hope this clarify you.

harsh (Business) (105 Points)
Replied 18 May 2018

The customer doesn't care about the freight. They want bill based on sale rate * weight * Gst. And doesn't want to us to issue any frieght bill or even charges on the invoice. What should we do.

Is it will be exempted as ' services by way of transportation'..?

Or we took the service and needs to pay RCM 5% by making a self purchase invoice.??

In our accounting, we have written this amount under indirect expenses..

Vikas Acharya (System Administrator) (87 Points)
Replied 18 May 2018

If selling price should not include freight and if freight is on To Pay basis (payable by buyer), then issue separate debit note towards freight including GST payable on freight if applicable.