Please clarify the following points.
1. The Order placed by Singapore Company to Indian manufacturer to manufacture Pharmaceutical Machinery and payment is made in USD.
2. The machine against the above order will be supplied in India to an Associate unit of Singapore Company to manufacturing pharmaceutical formulation.
3. The Indian associate unit is neither SEZ nor EOU.
Query: Can we do such type of transaction? If yes, please let us know procedure to be followed by Singapore Company who is placing order and transferring fund to Indian Manufacturer who is manufacturing machinery and then supplying to Indian Associate Company of Singapore.
Indian Manufacturer to Charge GST on Machinery Supply to Indian Associate of Singapore Company, Despite USD Payment An Indian manufacturer received an order from a Singapore company to produce pharmaceutical machinery, with payment in USD. The machinery will be supplied to an Indian associate of the Singapore company, which is neither an SEZ nor an EOU. The query concerns the legality and procedure for this transaction. Responses suggest charging applicable GST since the supply occurs within India, despite payment in USD. One reply advises that if the Singapore associate primarily exports, an EPCG license could be beneficial to avoid GST. Alternatively, invoicing the Indian company could allow it to use tax credits, depending on the transaction terms. (AI Summary)
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