Tax rate -Applicability

[VIGNESH]

Sir . A cement dealer is raising invoice for sale of cement bags (28%), he also does loading & unloading and charges Freight on the bills (18%). is this correct? or should he charge 28% on the total bill under composite supply.

[Rajagopalan Ranganathan]

Sir,

If the transaction value of cement includes loading and unloading charges, freight, etc. then it is enough that the supplier charges gst @ 28% of the transaction value. But if he charges loading and unloading charges, freight etc separately in addition to the value of cement supplied then he has to pay gst separately on these elements. However, if the recipient falls among the categories of recipient mentioned in column (4) of Notification No. 13/2017- Central Tax (Rate) dated 28.6.2017 as amended the gst on freight is to be paid by the recipient under RCM.

[Shilpi Jain]

For the value of the cement and the other charges he should charge 28%

[KASTURI SETHI]

Loading and unloading charges are integral part of transportation of goods. Hence it a composite supply. Covered under 28% rate of tax.

[YAGAY and SUN]

Agree with the experts that in case of composite supply, the rate of tax will be depended on the principal supply of the goods, hence rate of tax will be 28%.

AI Summary

Composite supply principle: tax rate follows principal supply so ancillary freight and handling attract the same higher rate.
Where loading, unloading and freight are included in the transaction value of cement, the supplier may charge the GST rate applicable to cement on the entire invoice as a composite supply; if those services are separately billed, GST must be applied to them separately. If the recipient falls within categories requiring reverse charge under Notification No. 13/2017, GST on freight is payable by the recipient under the reverse charge mechanism. Loading and unloading are commonly treated as integral ancillary services, so the rate follows the principal supply.