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2019 (8) TMI 471 - AAR - GSTClarification regarding applicability of Tool Amortisation cost (Transaction Value) in GST Regime - Capital Goods received freely on returnable basis from the recipients (Customer) for parts production and supply - HELD THAT:- The CBIC in its Circular No 47/21/2018-GST dated 08.06.2018 has clarified that Moulds and dies (Tools) owned by OEM that are provided to a component manufacturer on FOC basis do not constitute supply as there is no consideration and in such cases, the value of goods provided on FOC basis shall not be added to the value of supply of components. However, in case the contractual obligation is cast upon the component manufacturer to provide moulds/ dies but the same have been provided by the OEM on FOC basis, then the amortized cost of the moulds/dies is required to be added to the value of the components supplied. The issue raised by the applicant is covered under Issue number I and Clarification 1.1 and 1.2 of the Circular No 47/21/2018-GST dated 08.06.2018 - This Ruling is based on examination of the contract / purchase order furnished by the Applicant in the case of their customer M/s. Tata Autocomp systems Ltd., (OEM) where the applicant is not under any obligation to use their own tools/ moulds for manufacture of the components and the same are supplied to them free of cost and on returnable basis. This ruling will apply to other contracts entered into by the Applicant if and only if the terms and conditions contained therein are the same as those contained in the contract placed before us. The cost of the tool/s supplied by the OEM on FOC basis, under the situations discussed in para 11 and 14, to the Applicant is not required to be added to the value of the parts supplied by the Applicant and hence the said value is not liable for GST.
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