Export of Service

[Kaustubh Karandikar]

XYZ had exported equipments earlier which needs Quality Certification from a recognized agency in India. XYZ got done the technical audit and certification of the equipment before exporting the same. The charges incurred for this certification was recovered from the foreign customer.Is XYZ liable to pay GST on the amount recovered?

AI Summary

GST Applies to Certification Costs Recovered from Foreign Customer per Section 15(2)(c); Treated as Zero-Rated Supply XYZ exported equipment requiring a quality certification from an Indian agency. The certification costs were recovered from the foreign customer. The question arose whether GST is applicable on the recovered amount. Two responses clarified that according to section 15 of the GST Act, incidental expenses, such as certification costs, should be included in the value of the exports. This means the amount recovered can be treated as a zero-rated supply, and a debit note can be issued. Both responses agree that these expenses form part of the supply's value under section 15(2)(c).