Invoice for Export Tooling cost recovery - No physical movement will attract VAT

[Guest]

Dear Sir,

We are the casting manufacturer. For manufacture of castings we are using the tool developed by us on behalf of customer and retained by us for manufacture of castings.

For recovery of tool cost from Export customer we are raising invoice and the same considered as income.

WE are not charging the VAT or excise duty.

But VAT authorities informed us to charge VAT.

Please advice whether we need to charge VAT.

Regards

K Srinivasan

[Guest]

Dear Sir

I have not seen any reply / views so far.

Can we consider the department view is correct?

Regards

K Srinivasan

[Guest]

Dear Experts

Request your views .

Regards

K Srinivasan

AI Summary

VAT on exported tooling: whether VAT must be charged when tooling is retained and invoiced to an export customer. Manufacturer invoices export customer for recovery of tooling cost while retaining the tooling, treating receipts as income without charging VAT; VAT authorities assert VAT must be charged despite no physical movement, raising whether such recovery is a VAT-liable transaction when tooling remains with the manufacturer.