TaxTMI 
TaxTMI 
X(USA) has signed contract with Y(India) for production of goods & export to X.Mould was to be provided by X as per contract. X has given advance of ₹ 50 L to Y for purchase of mould in India & to be retained by Y for production. Y purchased mould from Z(India) & availed GST input on this. Should Y raise export invoice of mould to X(though physically to be retained by Y)? or Y shall add amortised cost of mould in export invoices of goods to X? is input eligible on purchase of mould by Y from z.
AMORTISATION REQUIREMENT UNDER GST
18 Jun 2018 
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Amortisation of mould cost under GST: invoicing and physical movement determine ITC entitlement and value treatment.
Treatment of GST on a domestically purchased mould for production for an overseas principal depends on invoicing and physical movement. If the domestic supplier invoices the manufacturer, the manufacturer can claim input tax credit, but export treatment varies: when tools move from the principal to the manufacturer no supply or credit reversal arises and no amortised value need be added; where billing is to the principal but the manufacturer retains the mould, credit must be reversed and the amortised mould cost included in the value of supplied goods. (AI Summary)
Treatment of GST on a domestically purchased mould for production for an overseas principal depends on invoicing and physical movement. If the domestic supplier invoices the manufacturer, the manufacturer can claim input tax credit, but export treatment varies: when tools move from the principal to the manufacturer no supply or credit reversal arises and no amortised value need be added; where billing is to the principal but the manufacturer retains the mould, credit must be reversed and the amortised mould cost included in the value of supplied goods. (AI Summary)