Clarity required on Freight and applicable GST on same

[Guest]

We are EPC contrcators and Purchase material from manufacturer. Then we sell the same to our customer.

For example, I had placed PO on Cables Manufacturer before GST was implemented. The PO components were as following:

1. Ex-Works Value

2. Excise Duty @12.5%

3. CST@1%

4. Freight Including any applicable tax

Now, after GST implementation, ED & CST have been abolished and shall be replaced by GST@18%. The question is that 18% shall be charged only on Ex-works value or Ex Works+Freight? If this 18% is to be charged only on Ex-works value, then how much GST rate is applicable on freight value. As far as my knowledge goes, I need to amend the PO for 18% on Ex-works value only. No need to amend the PO for freight component. Please advise and clarify.

Regards,

Vivek

AI Summary

GST Applies to Freight Charges if Supplier Pays, Says Section 15(2)(c) of CGST Act 2017 An EPC contractor inquired about the application of GST on freight charges post-GST implementation, questioning whether the 18% GST should be applied only to the ex-works value or also include freight. A respondent clarified that, per Section 15(2)(c) of the CGST Act, 2017, if the supplier pays the freight, it is included in the transaction value, and GST is charged on the total. If the buyer pays, it is treated as a GTA service, subject to GST. Other participants agreed with this interpretation, confirming the 18% GST applies to freight if included in the invoice.