Cost break up requested - Customs

[Velayutham Panchatcharam]

Dear Experts,

We are located Unit in SEZ and our activity is manufacturing mould. Now we want to sell mould to one of our SEZ which is also located in Tamil Nadu. Now the Customs Officer is requested to produce cost break up for the mould as per Customs Act. Please clarify do we need to provide cost break because it is not second hand mould.

Regards

Panch

[KASTURI SETHI]

Cost breakup is required to arrive at cost of final product for the purpose of payment of GST. When goods are transferred from one unit to an other unit of the same firm, it is called captive consumption. Otherwise also if the goods are clearef for Industrial purpose, cost break up is required to compute the cost of final product for payment of GST.

AI Summary

Cost breakup requirement for intra unit transfers ensures accurate GST liability calculation on manufactured final products. Requirement to furnish a cost break up arises where manufactured goods are transferred between units for the purpose of computing GST on the final product. Transfers between units of the same firm constitute captive consumption, but a detailed cost allocation of inputs, manufacturing overheads and attributable expenses is necessary to establish the tax base for GST when goods are cleared for industrial use.