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GST rate of Freight

10 August 2021

If different rated products are billed in a single Invoice and Freight also charged in it then what rate to select for Freight? Highest among them or 5% or 12%?

What it would be called Composite Supply or Mixed Supply ?

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6 Replies

Tushar Chhabra (Assistant Manager) (72 Points)
Replied 10 August 2021

This will vary from case to case. it can't be determined basis the information shared by you

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Pratick Datta (53 Points)
Replied 10 August 2021

Suppose 3 products have different rate Rusk 5% , Namkeen 12%, Energy Drink 28% plus cess company Supplying to its distributor in a vehicle owned by the Company . The Company also charging freight it the same invoice to the distributor. Then what rate to select.

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CA ABHAY GUPTA (Practice) (3230 Points)
Replied 10 August 2021

According to me it is cover under composite supply as it is bundled service
GST on transport cost included in invoice should be the highest tax rate charged on any item in invoice.
As per section 8 of CGST Act, 2017 the tax rate should be highest tax rate in case of composite supply.
Other Experts Views are welcome.

Tushar Chhabra (Assistant Manager) (72 Points)
Replied 10 August 2021

@ pratick- since you know the rate of each product and you are charging it separately on the invoice then charge 18% on transport services.

For composite and mixed supply, single price is charged for two or more goods or services.

As per my understanding, you know the rates and you know the price of each product. then charge rate applicable on transport services

Pratick Datta (53 Points)
Replied 10 August 2021

@ CA Abhay Gupta - If it is Composite Supply then GST rate of Principal Supply have to be selected. If we select highest rate among them then it will be treated as Mixed Supply as per Sec 8. Is it so?

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VIKAS ESNAPURAM (CA-JOB) (226 Points)
Replied 11 August 2021

What is your invoicing structure are you raising invoices separately for the 3 items mentioned or not, if not then it is a mixed supply as they are not naturally bundled, and if you are raising separate invoices, how you are allocating transportation charges ( I mean in which invoice you are mentioning transport charges).

If you are giving 3 different invoices and showing transport charges separately on each invoice then it will become composite supply and the rate will be of principal supply.