GST on freight and insurance

[Kaustubh Karandikar]

XYZ supplying goods for export on payment of GST under claim for refund. In the invoice over and above the value of the supply and GST, they also charge freight and insurance from Indian port to the destination outside India. However, while paying GST the amount of freight and insurance is not considered being incurred for movement from port to outside India. Is it correct and if correct under which provisions because the GST authorities are demanding GST on the same.

AI Summary

GST Authorities Demand Tax on Freight and Insurance, Citing Composite Supply; Respondents Agree on Unified Tax Rate An entity exporting goods is charging GST on the supply value but excluding freight and insurance costs from the GST calculation, as these are for transport from an Indian port to an international destination. The GST authorities demand GST on these charges, considering them part of a composite supply. Respondents in the forum agree with the authorities, suggesting that freight and insurance should be taxed similarly to the goods themselves, as they are integral to the supply. Although this situation is revenue-neutral, the tax on freight and insurance should align with the goods' tax rate.