GST valuation clarification on Partial material supply by the customer

[suresh sathyamurthy]

As per the Purchase Order between A & B

a) A has to supply goods to B,

b) B will have supplying some critical parts to A at Free of cost, which will be part in the final product ( the parts supplied by B is out of scope of the above Purchase Order, A along with the material purchased by him, while assembling will incorporate the parts supplied by B in the final product as per the design given by B, and will be charging as per PO excluding the cost of material supplied by B)

c) Now B has request A to import the material in A's name from B’s parent company situated in foreign country

and B has agreed to reimburse custom duty, GST & clearing charges to A, for which A has to raise separate debit note with GST for claiming the reimbursement.

A will not be paying for the importer, ( the importer will be remaining unpaid)

Request to know from expert

i) Will there be any valuation issue for transaction mentioned in point b

ii) That could be implication for transaction as mentioned in point c above

Thanks in advance

AI Summary

GST Valuation: Free Components and Reimbursements from B to A Impact Tax Calculation per Relevant Rules. A discussion on Goods and Services Tax (GST) valuation involves a transaction between two parties, A and B. A supplies goods to B, while B provides critical components free of charge, which A incorporates into the final product. B also requests A to import materials from B's parent company, with B agreeing to reimburse related duties and taxes. An inquiry was made about potential valuation issues and implications for these transactions. The response suggests that the free components from B to A are considered additional non-monetary consideration, affecting GST valuation according to applicable rules for both scenarios.