Example
Mr A registered person sold natural honey without bearing brand name
for Rs 25000 and he also charge freight of Rs 500 on Bill of Supply. As Natural
honey is exempt for tax. The query arises whether freight is chargeable to tax.
Answer
No, there is no taxability in this situation under GST on freight as the
incidental expense (freight ) form part of value of wholly exempt product
according to section 15 of CGST Act and Value of Exempt supply = 25000+500 =
25500.
But on fright cost paid by the M/s ABC to transporter he is still liable to pay
tax on GTA service under reverse charge.