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

AI Summary

Excise Duty Not Applicable on Separately Invoiced Freight Charges; Service Tax on 25% of Freight Required A manufacturer inquires about the excise duty applicability on separately invoiced freight charges under two scenarios: when goods are sold on a FOR basis, and when sold on an ex-works basis with transport and insurance arranged by the seller. The response clarifies that excise duty is not payable on separately invoiced freight charges. However, service tax must be paid on 25% of the freight amount paid to the transporter, based on the lorry receipt.