GST ON FREIGHT PAID ON BEHALF OF RECIPIENT

[PANKAJ CHUGH]

HI,

Brief Facts: Invoice value ₹ 1,00,000 @ 18%

Freight of ₹ 10000/- paid by supplier on behalf of recipient. supplier issued debit note for the amount of freight on the recepient.

Query: whether there will be GST on the freight value to be shown in debit note ? If yes at what rate ?

Thanks

AI Summary

Composite supply: freight paid by supplier on recipient's behalf is taxed at the principal supply rate.
If freight paid by a supplier on behalf of the recipient is naturally bundled with the principal supply (a composite supply), the principal supply's tax rate applies to the freight and the debit note follows the original invoice rate. If the supplier merely reimburses the transporter on the recipient's behalf per contractual terms and consignment note, the amount may be treated as a reimbursement with GST borne by the recipient; classification depends on contract terms, consignment documentation, place of supply, and whether the transporter is a Goods Transport Agency.