Courier Charges In Tax Invoice

watch_later 3 years, 7 months ago

Hello Sir, Why should GST be charged on courier charges in tax invoice, when we are not providing any courier service but just passing on the courier charges to the buyer ?


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1 Answer

Pulkit Sharma watch_later 3 years, 7 months ago

Please read the article Valuation under GST.

Tax is charged on value of supply and value of supply includes everything incurred to make the supply possible. Even if expenses are incurred by recipient but were supposed to be incurred by supplier.


Referring to section 15 of CGST Act, 2017, If you are delivering goods through courier or any other transportation mode, it is for the purpose of supply and cost should be included in value of supply.

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    Thanks Sir, So what will be the rate of GST on courier value, if one lakh value goods r in 18% , Rs. 5000 goods in 5% and Rs. 100 goods in 28% and courier value is just Rs.500 - RANJEEV SINGHAL
    What is the principal item? Depends on that. If item with 1 lakh is principal item then charge tax at 18%. - Pulkit Sharma
    Composite supply and mixed supply are 2 confusing terms. I think government will soon come with a clarification on it. - Pulkit Sharma
    Sir, if we go by ONE ITEM ONE TAX RATE principle then Should tax rate on courier valve, not be as on the courier services providers , irrespective of rate on the items ? - RANJEEV SINGHAL
    You are not providing courier service. You are supplying material through courier and courier is your cost. One nation, one tax is myth. It is one nation one administration, but that is also myth. Need lot of improvements, which will be done over the time. - Pulkit Sharma
    Is this not leading to Cascading effect? I pay Rs100 to courier company and include that Rs100 in the invoice. The 100Rs already have the GST in it. When we tax the 100 in invoice, that leads to taxing the tax!! - Jayachandran C
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