Moulds And Dies & Export Supplies

[CABIJENDERKUMAR BANSAL]

Hello Sir, The design for Moulds/Dies/Tools was received from Foreign Entity (Customer). The Supplier (In India) makes the Mould/Die/Tool as per specifications in India and charges the same to Customer (Reimbursement + Some profit element). The Mould/Die/Tool never go to foreign entity (Customer) But the supplier suppliers items manufactured using the mould/die/tool. Please explain the taxability of making such mould/die/tool and taking reimbursement from Customer.

[Spudarjunan S]

Dear Sir,

Hope you will be charging for the items supplied from such mould/die/tool. In such case induce the cost of such mould/die/tool into the price of the items supplied.

When you are getting reimbursement from the customer for such mould/die/tool you treat such consideration as advance for the items manufactured using the mould/die/tool. Any how for the time of supply of goods the date of receipt of payment is not considered as per notification no.66/2017 CT dated 15.11.2017.

Kindly look into RBI/FEMA regulations for the receipt of advance for export of goods to check the restrictions if any.

AI Summary

GST on reimbursement for moulds and dies treated as advance for manufactured goods; include mould cost in supply price. Reimbursements from a foreign customer for moulds/dies/tools manufactured in India should be treated as consideration for the goods subsequently produced using those moulds and may be regarded as an advance for the items manufactured, thereby forming part of the taxable transaction value; the supplier should include mould cost in the price of supplied goods and check time-of-supply treatment and RBI/FEMA rules for receipt of advances for export supplies.