Freight charged/Services by way of transportation of Goods

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..... Freight charged/Services by way of transportation of Goods
Query (Issue) Started By: - Shipra Garg Dated:- 18-8-2017 Last Reply Date:- 19-8-2017 Goods and Services Tax - GST
Got 8 Replies
GST
Dear Sirs, Kindly help me in identifying the purpose of Point 9 of GST service exemption list. The same has been reproduced below: "9. Service by way of transportation of goods (i.) by road .....

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..... except the services of - (A) a goods transportation agency; or (B) . . . . " Section 15(C) of CGST Act: "incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; .....

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..... " With due regards to Section 15 ibid, I am of the view that freight charged by a trader should be kept of GST levy for the reason mentioned in Service exemption list, else what is the purpose of giving such exemption. Please put some light on it. Reply By RAMESH PRAJAPATI: The Reply: 1) Notification No 12/2017-Central Tax dated 28.06.2017 exempts the Services by way of transportation of goods .....

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..... (i) by road except the services of- (A) a goods transportation agency; or (B) a courier agency; (ii) by inland waterways (HSN 9965) -- It is available to any registered person. 2) Section 15(2)(c) The value of supply shall include incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in .....

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..... respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; Reply By RAMESH PRAJAPATI: The Reply: Section 15 states how to determine the value for taxable supply. There are inclusions and exclusions also. Reply By KASTURI SETHI: The Reply: The following kinds of services by way of transportation of goods by road are exempted:-. 1. Tran .....

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..... sportation of goods by way of a three wheeler scooter. 2. By a tractor 3. By a vehicle not covered under Motor Vehicle Act which falls under the Scope of GTA. Example can be traced out on any relevant site. Section 15 (C) talks of valuation of taxable service or goods. If any activity falls under the above mentioned exempted services, the valuation Section does not come into force. Reply By KAST .....

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..... URI SETHI: The Reply: I also support the views of Sh.Prajapati, an expert. Reply By Shipra Garg: The Reply: Sirs, I respect your view points. But I would like to put it this way. When we buy cement from some vendor, we are billed with two elements: Particulars Rate Qty INR Cement (Principal Supply) ₹ 100 10 Kgs 1,000 Freight 100 Total 1,100 CGST 14% (Rs. 1100 x 14%) 154 SG .....

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..... ST 14% (Rs. 1100 x 14%) 154 Total 1,408 Now, coming back to my original query: Shouldn't freight be exempt from GST levy by virtue of N No. 12/2017-Central Tax dated 28.06.2017, which exempts the Services by way of transportation of goods (i) by road except the services of- (A) a goods transportation agency. As per Section 2(30): Composite Supply is a supply of two or more taxable supplies. .....

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..... In above case there is one taxable supply and other is exempt by virtue of N No. 12/2017. Reply By Vamsi Krishna: The Reply: When you buy cement, freight is bundled together with the principal supply of cement supply and hence there is no question of exemption. Here the transporter who renders transportation services to Cement supplier/seller ( not to the buyer) falls under exemption notificati .....

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..... on. The GST liability of transportation has to be discharged by Cement supplier under Reverse charge. You being buyer has nothing to do with their exemption, rather have to discharge the GST liabilty on total purchase value which includes Freight (as bundled freight) Reply By KASTURI SETHI: The Reply: No exemption is available. It is a case of composite supply. Agree with Sh. Vamsi Krishna. Ji. .....

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..... Reply By KASTURI SETHI: The Reply: The element of "freight" cannot be dragged into Composite Vs Mixed Supply. Govt.' s intention is to levy GST on frieght except a few clear cut exemptions as explained in my reply yesterday and further exemption from GST on freight is available vide entry no.21 (b) (c) of Notification no.12/17- CT ( Rate) dated 28.6.17.
Discussion Forum - Know .....

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..... ledge Sharing .....

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