GST on freight charges

[NAUSHERAWAN SM]

Let me know whether freight charges shown seperately in tax invoices will be part of taxable Turn over for calculation of GST/IGST

[Himansu Sekhar]

Yes, it will be added to the value

yes, it is composite supply.

[THYAGARAJAN KALYANASUNDARAM]

Dear expert,

Then what HSN should mention in the invoice against the freight and please clarify the following situation.

Situation 1.

If I'm supplying goods single products and charging freight/packing and forwarding / delivery charges separately.

Situation 2.

If I'm supplying two different products with same rate of tax but two different hsn and charging consolidated freight / packing and forwarding /delivery charges separately.

Situation 3.

If I'm supplying two different products with different rate of tax with hsn and charging consolidated freight / packing and forwarding / delivery charges separately.

Thanks in advance.

[MUKUND THAKKAR]

freight charges are not goods or services so need not require to mention Hsn code . HSN code for services and Goods only. freight charges and packing charges are Naturally in cost of entire supply of goods or services. supplier just showing is Separately as per terms and condition of purchase order.

[Himansu Sekhar]

Recently the FAQ released has clarified the issue, the freight will be apart of the value. Regarding the apportionment of the value between the products so as to charge the rates which are different, my view is, the freight value will be devided on the basis of the value of the products carried. It is through the residual method. Other experts may clarify the issue.

[Ganeshan Kalyani]

Freight is liable to GST at the rate applicable to material if the component of freight is shown on the face of the invoice. As regard rate applicability i am of the view that freight should be propotionate to the material and accordingly gst is payable.

[vk agarwal]

agree with mr kalyani

AI Summary

GST on freight charges: freight shown on invoices forms part of taxable value and must be apportioned for rate application.
Separately shown freight, delivery, packing or forwarding charges are included in the transaction value for GST/IGST and therefore form part of the taxable value. Freight need not have an HSN; it is treated as a component of the total supply price and may be shown separately on the invoice. Where multiple products on one invoice attract different tax rates, freight should be apportioned to the items proportionately by their values so the appropriate GST rate applies to each allocated freight portion.