Transportation rate of gst

[Bayyareddy DK]

Dear Sir,

My client is supplying goods in same invoice with two rate of taxes 18% and 12%. He is also delivering the goods to the customer and charging transportation charges. What rate of GST shall apply on transportation charges. whether highest rate of invoice 18%, or 5% rate applicable to transportation?. Please advice

[Shilpi Jain]

The transportation provided will not be a separate and has to be considered as a composite supply of goods. Since 2 rates of for goods sold can proportion the transport cost on reasonable basis and charges 12 and 18% on the respe tive proportion,..

In case you don't want to get into the Hassel of proportioning then charge 18% for entire transportation if the customer agrees to pay.

[Ganeshan Kalyani]

Sir if the customer can get ITC you can prefer to charge 18%.

AI Summary

GST on transportation charges: apply composite supply principles; apportion transport to goods' tax rates or charge highest rate if agreed.
Treat transportation charges as part of a composite supply of the goods; apportion the transport charge between the goods taxed at different rates on a reasonable basis and apply the respective tax rates to those proportions. Alternatively, with the customer's agreement or where the customer can claim input tax credit, charge GST at the higher applicable rate for the entire transportation charge to avoid proportioning.