Freight payment against Import

[Asish Kumar Nath]

 We paid to our foreign supplier in advance through proforma invoices which was excluding freight. Now they raised commercial invoice where freight charges in included and Bill of entry also bears the same value as on commercial invoice. So, there is an difference between proforma invoice and commercial invoice ( the freight amount ).

Now we have to pay the freight only to our foreign customer. Is there any TDS liability persists? If there what is the rate of TDS?

[YAGAY and SUN]

There would not be any TDS applicable on the freight since it has become the part of assessable value for calculating the customs duty. If you pay this freight amount to freight forwarder in INR then you are liable to deduct the TDS otherwise not.

[Asish Kumar Nath]

Bank  asked us to process thge payment in  FORM A2 only.Since it is the part of import, shall I process FORM A1 for this payment?

[YAGAY and SUN]

You would have to fill the information in Form A1 Since the freight shown separately in the invoice raised by your foreign supplier, it means the INCOTERMS were CFRs.  Kindly discuss this aspect with your Authorised Dealer (i.e. your Banker).

[Asish Kumar Nath]

THANKS.

[YAGAY and SUN]

Welcome!

Further, do lots of studies in the field of Taxation and GST.  It will enrich your knowledge and enhanance your career.  Last but not least, Knowledge is power, when shared.

Regards,

Pradeep Khatri

AI Summary

Assessable value inclusion: freight in supplier invoice is not separately subject to TDS unless paid domestically.
Freight included later in the supplier's commercial invoice constitutes part of the assessable value for customs and is not separately liable to TDS when paid to the foreign supplier; TDS arises only if the importer pays freight in INR to a domestic freight forwarder. If freight is shown separately (suggesting CFR terms), consult the authorised dealer on using Form A1 for the remittance and on bank declaration requirements to ensure correct forex and TDS treatment.