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Freight Calculation on Invoice

Mridul Sethi

Sir, I m working in manufacturing concern, & our one party asks us to show freight charges separately after sales tax calculation, as not to charge sale tax on that freight value, but as per our ERP setting we can calculate excise duty on that (freight+Basic rate) but freight cost does not show at assessable value place only basic rate shows there fore excise duty calculation is correct but assessable value showing is wrong, pls tell me know that it is neccessary to show exact assessable value in front of excise duty & if any notification or rule related to it

ERP System Error: Manufacturing Company Must Separate Freight Costs from Basic Rate to Avoid Sales Tax on Transportation. A manufacturing company faces an issue with their ERP system, which incorrectly calculates assessable value by not showing freight costs separately from the basic rate. A party requests that freight charges be shown separately to avoid sales tax on them. An expert advises that, according to a legal precedent, transportation costs reimbursed by the buyer should not be included in the assessable value. The company should show the basic price as the assessable value and separately list freight and insurance charges. The ERP system should be adjusted to reflect this calculation accurately. (AI Summary)
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