GST on imports

[Madhavan iyengar]

X Company based in India ( Gujrat) has placed order for tool on Y based in Germany

X will pay Y for the tool in foreign exchange

Y will make the tool and tool will remain in Germany for manufacture of parts for X

Manufactured parts will be sold by Y to X ie it will be imported by X and customs duty and IGST paid by X in India

issues

On tool purchase will X require to pay any duties as tool has never come into india

For parts sold by Y of Germany to X in India how the parts is required to be valued for customs duty purpose

AI Summary

Indian Company Queries Duty on Tool Kept in Germany; Customs Duty Valuation on Imported Parts Discussed X Company in India ordered a tool from Y Company in Germany. X will pay Y in foreign exchange, and the tool will remain in Germany for manufacturing parts for X. The parts will be imported to India, with X paying customs duty and IGST. The query raised concerns about whether X needs to pay duties on the tool, which never enters India, and how to value the parts for customs duty. Responses suggested considering CIF or FOB values for import duty and disclosing all transaction details to the Customs Department, which may require amortizing the tool's cost on imported goods.