Direct delivery of moulds

[Kaustubh Karandikar]

XYZ Ltd. (Maharashtra) has purchased moulds from PQR (Chennai). Moulds will be delivered directly to XYZ’s third party manufacturer (ABC) in Chennai. ABC will use the moulds to make the products and sell the products to XYZ. On receipt, XYZ sells these products to its customers). XYZ does not charge ABC any amount for use of the moulds. Ownership of the moulds remains with XYZ. 1) Can XYZ claim ITC of moulds even though the moulds will not be in XYZ’s premises? 2) What is the procedure / documentation to be done by XYZ, PQR and ABC in this transaction?

AI Summary

XYZ Ltd. Can Claim ITC on Moulds Delivered to Third Party, Requires Delivery Challan per CGST Act Guidance XYZ Ltd. in Maharashtra purchased moulds from PQR in Chennai, which will be directly delivered to a third-party manufacturer, ABC, in Chennai. ABC will use the moulds to produce items for XYZ, who retains ownership and sells the finished products to its customers. XYZ queries whether it can claim Input Tax Credit (ITC) despite the moulds not being on its premises and seeks guidance on the necessary procedures. Responses indicate XYZ can claim ITC, suggesting the issuance of a delivery challan to ABC and referencing specific sections and circulars of the CGST Act for compliance.