Dear Sir,

Our product falls in 12% GST rate. We recover courier charges from our client by mentioning the same in the invoice itself.

The issue is that- courier company charges 18% to us.

How should we charge the same from our client and at what rate??

ex: product price(basic)  rs. 6000

       CGST @6%:              rs.  360

       SGST @6%:               rs.. 360

       Total:                        rs.  6720

courier charges charged by courier company: Rs .460

CGST @9%:                        Rs.  41.4    

SGST @9%:                         Rs.  41.4  

Total:                                     Rs:  543

How should we make a single invoice by mentioning the courier charges in the invoice? What rate to apply? Kindly show us. 

Reply

DearSir,

As per section 15(2)(b) of CGST Act, the value of supply shall include any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both.

The above provisions make it clear that, courier charge is the part of the value of supply and accordingly the rate of GST applicable on sale of product i.e. 12% is applicable on courier charges too.

Further, as you are taking services of courier company as input services, ITC is available in respect of payment made to courier company.