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 andSUN]

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

Clarification Issued: Central Sales Tax Should Not Be Charged on Air Freight, Referencing Section 2(h) of CST Act, 1956. A query was raised regarding the inclusion of Central Sales Tax (CST) on air freight charges in an invoice totaling 2021.94, with a breakdown of goods value, air freight, and CST charges. A response clarified that charging CST on air freight is incorrect. The explanation referenced Section 2(h) of the CST Act, 1956, which defines 'sale price' and excludes freight costs if separately charged. The response was provided by a management and indirect tax consultancy team, emphasizing that CST should not apply to air freight charges.