flight expenses charged on bill @ 18%

[rakesh rohilla]

Dear Experts,

I am a pharmaceutical co and selling medicine and food suppliments. I charged in my invoice the value of medicine and freight. medicine is of 12% gst rate. the bifurcation of bill in which i colleced the gst tax are

Medicine value : 12000 @ 12%

freight charged : 1000 @ 18%.

My query is that i am not a service provider and whether the freight charged on bill is correct.or i have to charged freight on bill just as medicine i.e. 12% just as taken as value of supply concept. please clarify me.

[Rajagopalan Ranganathan]

Sir,

According to Section 15 (1) (c) "the value of supply shall include 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."

The freight charged by you will be covered by the words any amount charged for anything done. Therefore you can add the freight with the medicine value and you can charge gst @ 12%.

[RAMESH PRAJAPATI]

If supply contract is FOR destination, then freight & other expenses are part of taxable value of the goods and GST is payable on freight etc.

If supply contract is Ex-works then GST is not payable on the freight recovered from the customer at actual. However, supplier is required to pay GST on RCM basis on transport bill of GTA which can also be recovered from the customer.