Items which are need to be included in Invoice

[Sangeetha D]

"As a registered taxpayer engaged in the supply of exempted goods (e.g., garlic), I would like to clarify the GST treatment of transportation charges. If I sell garlic worth ₹5,00,000 (which is exempt from GST) and incur transportation charges of ₹7,000, can I include the total value of ₹5,07,000 as exempt in my invoice, or am I required to charge GST on the transportation charges separately?

[Shilpi Jain]

If you are the supplier and you are selling garlic for a price along with transportation up to customer place, it is a composite supply and not liable to GST since principal supply is garlic which is exempt.

[Shilpi Jain]

Even otherwise, if its a mere transportation of garlic, and if garlic is in its original form without any processing, etc, then it is transportation of agricultural produce which is exempt from GST.

[Sangeetha D]

Thanks for your reply mam,

Selling garlic along with transportation up to customer place. Which means i can add items like this , in my invoice. Is that right Mam.

Description               HSN/SAC       Tax                   Qty          Rate              Value 

Garlic                        0703                0%                  xxx            xxx                xxx

Transport Charges   9965                 0%                   xxx          xxx               xxx

[Lakshya Goyal]

You need to use same HSN of Garlic 0703 for transportation charges as well. Don't use 99 SAC for transportation, as it would imply separate service and not a composite supply. If using separate SAC, transportation charges would be taxable.

[Lakshya Goyal]

Edit: Also SAC code can be used to attract exempt supply of transportation, if garlic is without processing and is a agricultural produce. As Mentioned above by Shilpi Jain Ji.

[Shilpi Jain]

Use the same HSN as that of garlic as it is not a transportation service that you are providing to your customer but it is all part and parcel of your sale of garlic.

[KASTURI SETHI]

Pl. also read replies against Issue ID  119706. 

AI Summary

Composite supply of exempt goods with transport: transport charges form part of the exempt supply and are not separately taxable.
Transportation charges for delivery of an exempt agricultural product in original form form part of the composite supply whose principal supply is the exempt good and should be invoiced under the same HSN and treated as exempt; use of a separate SAC or separate service characterization for transportation risks creating a taxable distinct supply.