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Design Service Charges, Goods and Services Tax - GST

Issue Id: - 117383
Dated: 28-7-2021
By:- Kaustubh Karandikar
Design Service Charges

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XYZ exported goods without payment of GST to PQR, USA. The product design for the same was made by XYZ as per the requirement of PQR and charges for the same was separately recovered from PQR by issuing a service invoice as ‘Design Service Charges’. Is XYZ required to pay GST on the amount recovered from PQR?

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Showing Replies 1 to 3 of 3 Records

1 Dated: 28-7-2021

In my view, XYZ is not required to pay GST on the amount of design service charges inasmuch as these charges have nexus with the goods exported. These charges are integrated with the exported goods. (though charged separately) .The burden of proof regarding the nexus is cast upon the manufacturer-exporter.

2 Dated: 31-7-2021
By:- Shilpi Jain

Further, even if it is an independent supply, the design services would also be an export of service.

3 Dated: 8-8-2021
By:- Ganeshan Kalyani

I agree with the view of both the experts.


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