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GST on Freight and its treatment, Goods and Services Tax - GST

Issue Id: - 112429
Dated: 24-7-2017
By:- CA BIJENDER KUMAR BANSAL
GST on Freight and its treatment

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Dear Sir,

Now as GST regime, GST is also charged if supplier is charging Freight on invoice.

In some cases, supplier simply levies Freight without SAC code and charges GST.

Our query is whether we should open a SAC code and show credit on freight amount separately ? or it should be apportioned over the products purchased and taken credit according to that ?

Please clarify ?

CA Gorav Goyal

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Posts / Replies

Showing Replies 1 to 15 of 17 Records

1 Dated: 24-7-2017
By:- KASTURI SETHI

Transaction value is required to be inclusive of all expenses including freight, insurance etc. as per Section 15 (1) of CGST Act. You can take ITC without apportionment, if otherwise eligible.


2 Dated: 24-7-2017
By:- Ganeshan Kalyani

If the rate of product on invoice is same then no need to apportion the freight element.


3 Dated: 24-7-2017
By:- MARIAPPAN GOVINDARAJAN

Up to the turnover of ₹ 1.5 crores (I suppose) the supplier need not indicate HSN code in the invoice. GST can be levied as per the existing rate. In such cases, in my opinion, you may take credit for the entire amount.


4 Dated: 24-7-2017
By:- MADAN RAHEJA

Agreed with Sh. Sethi. Since freight is part of transaction value of goods, no need for showing seperate SAC code for it. Only HN for the goods, if applicable, may be mentioned.


5 Dated: 25-7-2017
By:- Kishan Barai

Let's make it simple

For e.g. you buy product of 100 INR with 18% GST with freight cost 10 INR so your total bill would be 110 + 18% = 129.28

Now you buy product of 100 INR with 28% GST with freight cost 10 INR, your bill would be 110 + 28% = 148.8

Freight would be considered as a composite supply in GST


6 Dated: 25-7-2017
By:- Kishan Barai

SAC Code of freight would be shown by freight forwarder to your supplier availing his services but when you buy from him, he is not doing freight business; he is supplying products to you.


7 Dated: 25-7-2017
By:- CA BIJENDER KUMAR BANSAL

Thanks to all for your reply.

Mr. Kishan Barai, I understood that he is not doing transport business and so no need to show SAC code by that supplier in Invoice.

Then when we taken ITC , under which code we should take credit:- HSN code of product or we should take in SAC code of Freight. ?

Please clarify.


8 Dated: 25-7-2017
By:- KASTURI SETHI

HSN code of product.


9 Dated: 25-7-2017
By:- Kishan Barai

HS Code


10 Dated: 25-7-2017
By:- CA BIJENDER KUMAR BANSAL

sir, if there are two/three products having different HS code then on which HS code we will show ITC on that Freight ?


11 Dated: 25-7-2017
By:- KASTURI SETHI

Sir,. When the element of freight has been included into transaction value for payment of GST, we should not talk of independent existence of freight for ITC. Pl. Read definition of Composite Supply and mixed supply along with definition of transaction value. Picture will become clear.


12 Dated: 25-7-2017
By:- CA BIJENDER KUMAR BANSAL

Sir, i totally agree with you. we should not talk individually about freight.

Basically i want to understand how should we claim that gst on Freight.

Should we apportion it over main products and show accordingly in different hsn code or in any of hsn code over invoice ?


13 Dated: 25-7-2017
By:- subramanian vijayakumar

It) is composite supply. I agree with the experts view no need for hscn


14 Dated: 25-7-2017
By:- Kishan Barai

If it's mixed supply freight would be charged as per Product with maximum GST rate.


15 Dated: 26-7-2017
By:- HimansuSekhar Sha

Please refer q 47 of tweet FAQ.


1

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