Freight charged/Services by way of transportation of Goods

[Shipra Garg]

Dear Sirs,

Kindly help me in identifying the purpose of Point 9 of GST service exemption list. The same has been reproduced below:

“9. Service by way of transportation of goods

(i.) by road except the services of –

(A) a goods transportation agency; or

(B) . . . . “

Section 15(C) of CGST Act:

“incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services;”

With due regards to Section 15 ibid, I am of the view that freight charged by a trader should be kept of GST levy for the reason mentioned in Service exemption list, else what is the purpose of giving such exemption.

Please put some light on it.

AI Summary

GST on Freight: Exemption Clarifications Under Notification 12/2017 and Section 15 of CGST Act Explained A forum participant inquired about the GST exemption on freight charges under Point 9 of the GST service exemption list, questioning whether freight charged by a trader should be exempt from GST. Respondents clarified that Notification No. 12/2017 exempts certain transportation services from GST, but freight is generally included in the taxable value of supply under Section 15 of the CGST Act. It was explained that when freight is bundled with the principal supply, such as cement, it is considered a composite supply and subject to GST. Therefore, the buyer must pay GST on the total purchase value, including freight.