CST on Freight Charges

[ASHISH DESAI]

if Freight is mentioned separately in the Invoice for inter-state sales, is CST applicable on the billed amount of freight?

[YAGAY andSUN]

CST is not payable on outward freight (if charged separately) and outward insurance if property in goods passes to buyer at the time of despatch.

[Yashasvi Sharma]

No

[Guest]

Sec 2(h) of CST Act,1956 says “sale price” means the amount payable to a dealer as consideration for the

sale of any goods, less any sum allowed as cash discount according to the practicenormally prevailing in the trade, but inclusive of any sum charged for anything doneby the dealer in respect of the goods at the time of or before the delivery thereofother than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged."

It means that Sale price does not include Freight charges will not attract CST when shown separately in they Invoice.

Thanks and Regards

 R USHA

[devinder bagia]

Dear Harsha,

I also agree to above, freight is not includible for CST calculation if charged seperately in invoice and property in goods passes at the delivery time to buyer like in case of E-1 transaction under section 3 of the CST act.

Regards,

CA Devinder Bagia

[Guest]

CST is not payable on outward freight, if charged seperately. But  goods & freight show in one invoice CST will attractive.

from

gmsreddy

[Mallikarjuna B]

If as per terms of the contract of transaction, the delivery was complete when the goods were loaded on railway and there after the risk of transit was of purchaser, then the freight can not be included in the sale price but in case the sellar was resposible for the risk of transportation up to the distination, then the sale price was includuble with the freight charges. ref.In CCT v. shah Gordhandas Bhikaridas  (2006 (10) TMI 378 - MADHYA PRADESH HIGH COURT)= (2008) 22 (II) ITPJ 105 MP HC : 2007 10 VST 349 MP Jadgement.

Mallikarjuna Rao Bandaruaplli

[r.rajkumar kumar]

it depends of the contract entered the contract of sale is quoted total price including fright that cst

will be attracted. if the contract of sale mentioned applicable fright or fright amount cst will not attracat.

[Sharad Sonawane]

Dear Sir

 

 Please tell me What's Mening of CT-3 (mening of CT)?

[Guest]

CT - 3 is the form connected with purchases made by EOU from DTA.

The EOUs can procure goods from DTA (Domestic Traffic Area) without payment of Central Excise duty as mentioned in the Chapter X of Central Excise Rules, 1944. 

However, it should be noted that such procurement from DTA is against CT-3, which is issued by the Superintendent of Customs and Central Excise in charge of the EOU. Such goods are required to be brought directly from the manufacturer /warehouse into the unit's premises under AR3A and examined by the designated officer. 

After examination of such goods, one copy of AR-3A is sent by registered post to the jurisdictional Central Excise authorities as a Re-warehousing Certificate in token of receipt of the goods in the unit. To avoid separate permission every time, the EOUs are issued pre-authenticated CT-3 in booklet form and against such pre-authenticated CT-3; the EOUs are allowed to procure capital goods, raw materials, consumables etc. Goods procured from DTA and found to be defective can be returned to the manufacturer under Chapter X procedure of erstwhile Central Excise Rules, 1944.

[Sharad Sonawane]

Please Mening of CT-3 ? (long form)

AI Summary

Freight charges exclusion from taxable sale: CST not payable when freight is separately billed and property passes at dispatch. Freight billed separately does not form part of the sale price for CST when property in the goods passes to the buyer at dispatch, so outward freight and outward insurance separately shown are not taxable; freight included in a single invoice or where the seller bears transportation risk is includible in the sale consideration and attracts CST. CT-3 is a pre authenticated form for EOUs to procure goods from DTA under Chapter X procedures, with AR 3A examination and re warehousing documentation.