Gst Twice On Delivered Basis Supply

CP Singh Teotia
watch_later 3 years, 7 months ago

Dear Experts,

We had supplied FG to customer and charged freight ₹ 15000/-from customer in invoice accordingly we paid GST on total invoice amount.

Now Transporter (GTA) is came for payment of freight with LR.We paid the freight to transporter and deposit GST in reverse charge and avail ITC.

This would double taxation on freight, ie. at the time of supply and at the time of payment to GTA.

Further ITC is also not available to us for GST paid on freight in invoice.

Kindly suggest how to bill so that ITC should be eligible without double tax on freight.

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1 Answer

Pulkit Sharma watch_later 3 years, 7 months ago

The entire transaction you explained there is nothing wrong abnormal in this.

You will get input credit of GST paid on freight under RCM. GST should be charged on value of supply and value of supply includes freight cost.

Your customer (B2B) can avail input credit on entire invoice amount including freight.

You can take input credit of tax paid under RCM. But only after payment is made and return filed.

Yes initially the cash outflow will be higher but from next month the tax flow cycle will come to normal.

If you claim this to be double taxation than every supply is double taxed. For instance a trade pay tax at the time of purchase and sale.

Here your position is similar to a trader, where you purchase freight service from GTA and sold to your customer.

  • chatComments
    Sir any limit of payment to GTA or RCM when paid small amounts to a TRANSPORTER - TARA DUTT
    Yes, goods, where gross amount charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees; - Pulkit Sharma
    goods, where gross amount charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred fifty; - Pulkit Sharma
    Same like service tax. - Pulkit Sharma
    Thanks Sir. It mean if we pay Rs. 500/- to a unregistered courier or transporter then no RCM apply. - TARA DUTT
    Thank you so much - TARA DUTT
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