RMC ON FRIGHT

[Shailander Jain]

One of our client is Cement Dealer and charging tax under forward charges on cement sale @ 28%. Now cement company appointed him as C&F Agent and paying secondary freight for Transportation of Cement bag from Depo to Sub dealer/customer location.

My query is : Can dealer raise secondary freight invoice to Cement company under REVERSE Charges mechanism with the object that GST on freight will be paid by cement company.

AI Summary

Reverse charge on freight may apply where transport is by a goods transport agency and the payer bears tax liability.
Reverse charge liability on freight depends on whether the service is that of a goods transport agency issuing consignment notes and on the contractual role of the transporter. If the transporter qualifies as a GTA and has not opted for forward charge, the person who pays or bears freight may be liable under reverse charge. If the distributor qualifies as a pure agent, reimbursements for actual freight borne on behalf of the principal are treated as borne by the principal; valuation rules determine whether such reimbursements form part of transaction value.