TaxTMI 
TaxTMI 
For Exports on payment of GST & without payment of GST under LUT, whether, the value to be shown on the tax invoice should include freight charges recovered from foreign customer for movement of goods from factory to Port / Airport as well as from Port / Airport to the foreign customer?
Value for Exports
12 May 2019 
5 Replies 
1653 Views Asked by
Inclusion of freight charges in export invoice value depends on contractual terms and Section 15(2) valuation rules.
Freight charged to a foreign buyer is generally includible in the tax invoice value under the valuation principle of Section 15(2) as part of the value of supply, except where contractual terms allocate freight otherwise. Commercial terms matter: CIF embeds freight up to buyer's destination; FOB allows separate freight invoicing. Taxes and duties are not exported; if GST is paid on freight to buyer's destination the related input tax credit cannot be encashed. (AI Summary)
Freight charged to a foreign buyer is generally includible in the tax invoice value under the valuation principle of Section 15(2) as part of the value of supply, except where contractual terms allocate freight otherwise. Commercial terms matter: CIF embeds freight up to buyer's destination; FOB allows separate freight invoicing. Taxes and duties are not exported; if GST is paid on freight to buyer's destination the related input tax credit cannot be encashed. (AI Summary)