GST on freight-In invoice as well as to GTA.

[Narendra Soni]

Dear Experts,

We had supplied FG to customer and charged freight ₹ 15000/-from customer in invoice accordignly we paid GST on total invoice amount.

Now Transporter (GTA) is came for payment of freight with LR.We paid the freight to transporter and deposit GST in reverse charge and avail ITC.

This would double taxation on freight, i. at the time of supply and at the time of payment to GTA.

Fyrther ITC is also not available to us for GST paid on freight in invoice.

Kindly suggest how to bill so that ITC should be eligible without double tax on freight.

[Ganeshan Kalyani]

If freight is borne by supplier then it shall be added to the value of goods on the face of invoice and tax would be levied at the rate applicable for the taxable goods. It means supplier will end up paying more than 5%. Thus it is advisable to ask customer to pay freight amount. However other terms between supplier and customer need to be taken into consideration.

AI Summary

GST on freight: treat freight borne by supplier as part of taxable value, chargeable at the goods' rate.
Where the supplier bears freight, that freight must be added to the taxable value of the goods and taxed at the rate applicable to those goods; treating the same freight as a separate reverse-charge payment to a GTA creates potential double taxation and affects input tax credit eligibility. To avoid this, freight should be contractually charged to the customer or invoiced so that it is not both included in the supply value and later subjected to reverse charge.