GST on freight charges

[Kaustubh Karandikar]

Goods are supplied to SEZ under LUT without payment of GST. Subsequently, Debit Note is issued to the customer towards recovery of freight charges in relation to this supply. Is GST required to be paid against such recovery?

AI Summary

GST Not Applicable on Freight Charges via Debit Note for SEZ Supplies Under LUT; Considered Zero-Rated Exports. A query was raised about whether GST is applicable on freight charges recovered via a debit note for goods supplied to a Special Economic Zone (SEZ) under a Letter of Undertaking (LUT) without GST payment. One response clarified that supplies to SEZ units are considered zero-rated exports, thus not subject to GST. Another response explained that a debit note adjusts the taxable value of the original supply, not constituting a new supply, and should be treated the same as the initial tax invoice, implying no GST is required on the debit note.