SERVICE ACCOUNTING CODE (SAC) FOR FREIGHT, INSURANCE AND PACKING AND FORWORDING CHARGES

[SURYAKANT MITHBAVKAR]

We are manufacturers of pharmaceutical machinery. While selling the machinery we have to charge insurance,Freight and Packing charges separately after the basic value of the machinery and calculate GST on the total amount. As of date we are mentioning the above charges without any SAC. Now we have start to issuing E-invoice from April;-22 onwards..We understand that under E-invoicing system we have to mention the above charges with SAC.

Kindly let us know if there is any provision for the same. If yes let us know the SAC for the Freight, Insurance and Packing &forwarding charges.

[Ganeshan Kalyani]

Sir, the insurance, freight, packing charges are composite supply and as such the HSN of main supply would apply.

[Ganeshan Kalyani]

For e-invoicing if there are more than one line item on invoice you can pass invoice with HSN having higer value or each line item separately.

[KASTURI SETHI]

I agree with Sh.Ganeshan Kalyani Ji.

[Shilpi Jain]

Agree. for all the line items mention the HSN code of the machinery itself.

AI Summary

Composite supply: ancillary freight, insurance and packing charges follow the machinery's HSN for GST invoicing and e invoicing.
Freight, insurance and packing & forwarding charges that accompany sale of machinery are components of a composite supply and should be reported under the HSN/SAC of the principal supply (machinery); for e invoicing, invoices may either show the principal supply HSN for related ancillary charges or list each line item separately with its own HSN, with practical preference for using the machinery's HSN for all line items.