CST on Air Freight

[ghanshyam makwana]

Goods Value 1782.30
Air Freight 200.00
CST Charges 39.64
Invoice Value 2021.94/- Is it Right or wrong, CST taken on freight Charges , please help

[YAGAY and SUN]

Dear Ghanshyam,

In our opinion charging CST on the Air Freight is wrong practice. According to the Section 2 (h) of the CST Act, 1956 as amended from time to time:-

(h) "sale price" means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged:

This is for your kind information.

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

CST on freight: freight charges excluded from taxable sale price, so CST should not apply when freight is separately charged.
Charging CST on air freight billed separately is incorrect because the freight amount is excluded from the statutory sale price; where freight or delivery cost is separately charged, it is not part of the taxable value for CST and should not be subjected to CST.