Question

XYZ (Manufacturer) is making and supplying “Hanging Banner Assembly” attracting 18% GST. In the same invoice he is also charging separately, installation charges, freight charges and scaffolding charges and charging same GST rate i.e. 18%. Is it the correct way of issuing the invoice or for installation charges, freight charges and scaffolding charges he need to prepare service invoice separately with corresponding SAC Code and applicable GST Rate?

Answer

In your case manufacture is charging for following items
    (1) Hanging banner assembly (Goods)
    (2) Installation Charges (Services)
    (3) Freught/Cartage/Loading & Unloading of hanging banner assembly (these are incidental expenses)

The treatment in GST is as follows
    (1) Charge GST @ 18% applicable to goods.
    (2) There can be two possibilities and the treatment will be accordingly

(a) You are charging Lump-sum price for hanging banner assembly including installation :- In this case it will be consider as composite supply and tax will be charged @ 18% applicable to principal supply i.e hanging banner assembly
(b) The installation charges are shown separately whether in same invoice or in different invoice :- in this case the tax will be charged on installation services @ 18%.
(3) As per Section-15 of the CGST Act, 2017 all incidental expenses are to be included in the value of goods. Accordingly these will be in the value of goods for charging GST.  (Reply dt.29/04/2019)