GST on Tooling development charges - Export

[Asked by Guest]

Sir,

We are casting manufacturing industry . To manufacture castings we need to develop tool as per the overseas customer specification. Once the tool is developed and after submission of samples approved by customer we used to raise debit note on overseas customer .

The tool retained by us for further manufacture of components .

In the pre GST regime there is no excise duty applicable on debit for the tool cost recovery from overseas customer.

Please provide your valuable views in the GST regime whether GST is applicable on debit note on overseas customer for the tooling cost recovery for which the tool retained by us for further manufacturing of components

Regards

K.Srinivasan

AI Summary

Export of Services: tooling development charges treated as export service, not subject to GST when export conditions met.
Whether GST applies to debit notes for tooling development when the tool is retained: the advisory view treats the charge as a supply of service and an export of services, not subject to GST if export conditions are met. If characterised as a supply of goods, no export proof exists and CGST+SGST would apply as an intra state outward supply, making the tax a cost because the overseas customer cannot claim ITC. Attempts to split tool cost and development charges may be impermissible and could trigger GST liability.