Sir, While raising GST Tax invoices we are showing Freight charges in the invoice and charging GST. We are showing HSN code for Material and SAC for Freight Charges. But one of our customer asking to put HSN code for Freight also, is it correct or not. Please advise

Reply—As per Section 2(30) of the CGST Act, “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.

It is to be noted that, when goods are packed and transported with insurance., if any, the supply of goods(food), packing materials, transport and insurance if any is a composite supply and supply of goods is treated as a principal supply.

Where transportation is provided along with the supply of goods, then transport services are taxable at the same GST rate applicable to the goods involved. In view of this, the supplier cannot charge separately, different GST rates on freight charges and for the supply of goods in same invoice. You have to show it under the same HSN code which is of goods.