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Development Charges and GST, Goods and Services Tax - GST

Issue Id: - 114393
Dated: 10-12-2018
By:- Kaustubh Karandikar

Development Charges and GST


  • Contents

XYZ is the manufacturer of Product ‘A’ which attracts 12% GST. To manufacture this product, they require Blocks, Punches etc. which they get it done from outside. XYZ recovers this amount of developing the blocks and punches from the customer through tax invoice issued for Product ‘A’ but shows it separately as ‘Development charges’ for making blocks and punches. 1) Can XYZ charge the same GST which is applicable for product ‘A’ in respect of development charges recovered or 2) Need to issue a separate service invoice for development charges and charge the applicable GST?

Posts / Replies

Showing Replies 1 to 5 of 5 Records

Page: 1


1 Dated: 10-12-2018
By:- Ganeshan Kalyani

As per Section 15 of CGST Act, Development charges added on the face of the invoice shall attract the tax rate applicable to the principal supply. Thanks.


2 Dated: 10-12-2018
By:- Ganeshan Kalyani

If the said charges is collected thru separate invoices then the tax rate applicable to the supply of said service would apply. The standard gst rate is 18%. Thanks


3 Dated: 10-12-2018
By:- DR.MARIAPPAN GOVINDARAJAN

GST is applicable.


4 Dated: 11-12-2018
By:- KASTURI SETHI

Dear Sir,

Cost of products, namely, blocks, punches etc. is consumed in the cost of product 'A'. XYZ cannot charge the same GST which is applicable for product 'A' . In the same invoice, the rate applicable for development charges can be charged. In a nutshell, correct tax should be paid on both.


5 Dated: 11-12-2018
By:- Ganeshan Kalyani

Thanks Sri Kasturi Sir for enriching my knowledge.


Page: 1

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