GST on amount received from C&F agent

[Deepak Kumar]

Dear Experts

If a Cement dealer is getting some income in his 26As from a C&F agent under 194C, is it taxable?

The said amount has been shown as Transportation income also in P&L account.

Yes, the dealer is not a GTA.

Dealer is getting this amount towards reimbursement of transportation cost.

On emergency, the dealer has arranged his own lorry to transport the goods from C&F agent warehouse to his place. Since he has born the cost of transportation on behalf of C&F agent, C&F agent has reimbursed this cost to him.

Is it taxable under GST?

The dealer does not have any invoice relationship with C&F agent.

Goods invoicing is direct between the dealer and Cement company. The cement company has appointed the C&F agent for warehousing, logistics support etc.

AI Summary

Reimbursement of transportation costs may not be a taxable supply under GST if supported as pure reimbursement and not a service.
Whether amounts reimbursed by a C&F agent to a dealer for transport are taxable under GST turns on substance: reimbursements made without mark-up and supported by transporter invoices and contractual allocation of freight liability are not consideration for supply and thus do not attract GST, whereas amounts treated as transport services rendered by the dealer, invoiced or recorded as income, are consideration and taxable; documentary evidence and books of account control the classification.