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gst case problem

CA Nikita Motwani (Chartered Accountant) (912 Points)

29 March 2018

Suppose a person X purchases goods from 2 individuals A and B and directs them to transfer them to a company C.
A adds the freight amount in the invoice but B does not do so. The amount of freight would be paid by X.
Now what will be the treatment of this freight if -
1- X shows this amt in invoice and charges gst
2- X does not do so?
Kindly help me please I am very confused.

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15 Replies

Divakar (Student CA Final ) (11857 Points)
Replied 29 March 2018

If transporter is arranged by supplier and it is paid by him then transport value is added in value of supply and gst is leviable on that amount

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pallavirawat2000@gmail.com (2 Points)
Replied 29 March 2018

nsns hdjs

CA Nikita Motwani (Chartered Accountant) (912 Points)
Replied 29 March 2018

but if the transport value is paid by Mr X?

Divakar (Student CA Final ) (11857 Points)
Replied 30 March 2018

Whether X is supplier for company C or A AND B

CA Nikita Motwani (Chartered Accountant) (912 Points)
Replied 30 March 2018

for company C

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Divakar (Student CA Final ) (11857 Points)
Replied 30 March 2018

Yes for c who is supplier... Freight is added to supply only when it is arranged by supplier and paid by him...

CA Nikita Motwani (Chartered Accountant) (912 Points)
Replied 30 March 2018

OK thank u so much

Divakar (Student CA Final ) (11857 Points)
Replied 30 March 2018

Plz refer section 15(2)(C) OF cgst act for more clarification

RAMESH KUMAR SINGLA (PROFESSIONAL) (1777 Points)
Replied 30 March 2018

1. if supplier is required to pay the freight as per the agreement, then the cost has to be added to the value and GST to be paid accordingly. However, if the supplier is pure agent of the recipient and the cost of freight is to be borne by the recipient, then such cost cannot be taxed as supply of goods.

2. If the receipient pays the freight as per the agreement, it is purchase of transportation service. He will suffer the tax (under RCM OR otherwise) and take credit. Further, if the recipient has paid the freight merely to be reimbursed, then also the amount of freight has to be added to the value of supply.

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