REGARDING APPLICABILITY OF GST

[SANJEEV JADHAV]

Dear Sirs, Ours is foundry and manufacturing Alloy and Stainless Steel Castings falling under HSN 73259920 & 73259930. We are also making export to various countries. I have some queries regarding GST which detailed below:-

1. We are getting purchase orders from various export customers for development of patterns. We are preparing these patterns from outside pattern manufacturers. All pattern manufacturers are charging GST and sending invoices to us. We are availing ITC on Patterns. After development of castings, we are charging cost of patterns to overseas customer by preparing separate invoice. (Patterns are lying with us and invoices are raised only for re-imbersement of pattern cost) . Is GST applicable to this ?

2. Some times our export customers placing order to us and after few days from placing order they are cancelling their purchase order. Some times some activities in manufacturing process are completed and we are demanding some cost from customers towards cancellation of order for re-imbersement and our customers are also agree to pay. In this case if we prepared invoice for re-imbursement, is GST will be applicable to this transaction ?

Please inform your suitable suggestion at your earliest.

[Himansu Sekhar]

Case no 2_ gst is applicable

Case no 1. Give some time

,

AI Summary

GST applicability to reimbursements: cancellation charges are taxable while pattern-cost reimbursement remains under consideration. Whether GST is chargeable on reimbursements from overseas buyers for pattern development where the applicant claims Input Tax Credit on pattern procurement, and whether GST applies to amounts recovered from exporters for cancelled orders after manufacturing activity. The forum reply records that GST is applicable to cancellation reimbursements, while the issue concerning reimbursement of pattern costs remains pending further consideration.