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.
Pharma Company Debates GST Rate on Freight: 18% or 12%? Experts Cite Section 15(1)(c) of GST Act. A pharmaceutical company sought advice on whether to charge GST on freight at 18% or at the same rate as medicine (12%). Two experts responded. The first expert cited Section 15(1)(c) of the GST Act, suggesting that freight could be included with the medicine value, allowing a 12% GST rate. The second expert explained that if the supply contract is FOR destination, freight is part of the taxable value, and GST is payable. If Ex-works, GST is not payable on freight, but the supplier must pay GST on a reverse charge mechanism for the transport bill, which can be recovered from the customer. (AI Summary)
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