Excise duty chargeability on freight charged separately in invoice

[Yatin Bhopi]

Dear Sir

We are manufacturer. 1) The sale contract is on FOR basis i.e. the ownership of goods passes to the customer when goods delivered to the customer premises. We wish to show freight charges separately in the invoice: Is excise duty payable on freight charges? 2) Contract is on ex-works basis but transport and insurance is arranged by us and shown separately on invoice, ownership passes to the customer when goods given to the transporter: is excise duty payable on freight charges recovered?

Please advice

[SHIVKUMAR SHARMA]

Dear  Mr.Yatin

If you show freight amount Seprately in invoice You need not to pay excise duty on Freight But  you have to pay service tax  to the  Govt.on 25% of freight amount paid to the transporter on the basis of lorry Receipt.                                                 

Shivkumar Sharma

AI Summary

Excise duty on freight: not leviable when shown separately in invoice; service tax may apply to portion paid to transporter. Freight shown separately in the invoice is not subject to excise duty whether the sale is FOR or ex-works with transport arranged by the manufacturer. Separately stated freight paid to a transporter is subject to service tax, assessed on the basis of the lorry receipt.