GST queries, Goods and Services Tax - GST

[Yatin Bhopi]

Dear experts,

Below are some of my queries please share your views

1. We pay commission to foreign vendor who facilitate to find customers. But as per POS rules GST is not payable in such case.

Q. Whether this will be treated as exempted supply? (applicability of reversal of proportionate ITC)

2. There are some supplier who charged freight charges in their bill but not pay GST saying that GST payable by receipt. But actual freight is paid by supplier to the transporter and not by us.

Q. Who is liable to pay tax?

3. We purchase goods on ex works basis. We also insured our goods against damage, accidental, theft etc. As per Section 17(5) we are not eligible to avail ITC if goods lost.

Q. In case of accident of tanker, insurance company settle our claim including GST amount. Is there any issue?

4. We raise debit notes to the transporter to recover excess shortages received in material lost in transit. Our raw material is of evaporation nature and travel long distance which cause shortages. We have set some acceptable loss percentage say 0.4%. If we found that loss occurred more than this limit we recover it from transporter

Q. Whether such recovery from transporter attract GST?

Posts / Replies

[Arunachalam siva]

Q2. Transporter will issue freight bill with(forward) or without(RCM) to supplier when supplier pays freight.

In that supplier is eligible for ITC on freight.

Here supplier has to charge GST on freight as it is shown separately on invoice. Like Gst on taxable value(basic price + freight).

You can avail ITC on receipt of material in your premises.

Q3. No issue will come. Only thing is ITC not available on lost material as you mentioned as per sec 17(5).

Q4. It may be treated as reduction in freight due to poor service. Here you are raising debit note on transporter then GST to be charged.

You have to declare the debit note in GSTR-1 return and liability will go up. This is credit note for transporter and they will declare CN in GSTR-1. This will reduce transporter tax liability.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Arunachalam Siva.

[CASusheel Gupta]

Q 1 - You are recipient of services and not supplier. Its your expenses not income. No question of reversal of ITC. You need to pay RCM on this charges as per Notification No. 10/2017- Integrated Tax (Rate) - entry no. 1.

Q2 Payment of tax on freight charged in invoice is suppliers liability not yours. It is composite supply for them.

Q3 Reverse ITC on the goods destroyed.

Q4 Debit note/Credit note can be issued by supplier only and not by recipient. In this case you are supplier. However DC/CC can only be issued subsequent to an invoice. In the absence of invoice, it can not be issued. Therefore u need to issue invoice with GST

CA Susheel Kumar Gupta

Thanks and Regards

8510081001, 9811004443

[Ganeshan Kalyani]

1. It is import of service. Igst is applicable.

2. Supplier is liable to pay GST under reverse charge on the freight service he has availed. Subsequently when he recovers the said expense from you then he has to charge GST provided the main material is taxable and you would be able to take credit because it is your input .

3. No issue, in my view.

4. GST paid will be reduced the extend of debit note

[Jaimin Kansara]

Q- One of my transporter damage our material and supplier return that material against raise a tax invoice, now question is that how can we recover that amount from my transporter.

1. Can we debit the transporter ledger with that amount, hence we pay RCM on transporter bill so GST will not affected.

2. and can raise a tax invoice to the transporter of that amount and charged GST also. if we raise a invoice then what will be the service and HSN code will show in invoice.

If any another solution, so please suggest that how we can deal with this type of transaction.