Dear All,
If the term of delivery is our ex-factory gate, but we are arranging Insurance and freight charges up to the buyer site. The same we are charging in the Invoice in below the line of Excise Duty & Sales tax amount and reimbursement made by the buyer. Please confirm Excise Duty and Sales tax will attract on Freight and Insurance.
Please be note that the charging of Insurance from buyer is more than we are paying for Insurance companies.
Clarification on excise duty and sales tax for freight and insurance charges: factory gate vs. customer's doorstep delivery. A query was raised about whether excise duty and sales tax apply to freight and insurance charges when delivery terms are ex-factory gate, but the seller arranges and invoices for these services. It was clarified that if the place of removal is the factory gate, freight should not be included in the assessable value for excise duty, but it should be if delivery is to the customer's doorstep. Sales tax applies if freight is part of the sale price. Excess insurance charges collected should be recorded as profit, subject to auditor review for service tax implications. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
