BHUPENDRA (EXECUTIVE FINANCE) (26 Points)
01 April 2021Dear All,
i am sale invoicing of 3 item of diff. GST rate 5% 12% and 18% and also 7% Freight charges on total taxable value so now customer is telling that you are GST charges on freight 5%, 12% & 18% of taxable value in front of item because freight is fixed in item wise, please clarify
thanks & regards
Bhupendra
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 01 April 2021
BHUPENDRA
(EXECUTIVE FINANCE)
(26 Points)
Replied 01 April 2021
@ Poornima Madhava Mam,
1. I have 2 items under GST @ 5% &18%, and freight 7% extra on total taxable value.
2. customer is telling that, you have to GST Charge on freight as per item GST rate like,
Item Amt. GST Rate Freight GST on Freight
x 5% /18% 7%
100 @ 5% = 5 7 @ 5%= .35
200 @ 18%= 36 14 @ 18%= 2.52
Alpesh Suthar
(56 Points)
Replied 01 April 2021
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 01 April 2021
First, it is required to differentiate between mixed and composite supply: Refer the link that I earlier shared to know more about the same.
1) If sale of 1st item is not dependent on 2nd item, then such transactions are mixed supplies. In case of mixed supplies, rate of GST for freight charge would be rate applicable for the good with highest rate of GST (in your case, GST on item no.2 is 18%). Hence rate of GST on freight charges would be @ 18%.
2) If sale of 1st item is dependent on 2nd item, then such transactions are composite supplies. In that case, rate of GST on freight charges would be rate as applicable to the principal good. Identify the principal good (item no.1 or 2) in your case and charge GST on freight charges accordingly.
3) In case only 1st item is sold on a particular day, then you may charge GST @ 5% on freight charges too.
CAclubindia
