GST on Product Development Services fees and Free sample given after R&D

[PRAVIN TALEGAONKAR]

Dear Sir,

I hope you are doing good.

My question whether GST is applicable on product development charges (R&D Services and free sample given to customer after Product Development Charges

Thanks & Regards

Pravin Talegaonkar

[Ganeshan Kalyani]

New entry 44A is being inserted to the notification no. 12/2017-CTR dated 28.06.2017

Research and development services against consideration received in the form of grants supplied by –

(a) a Government Entity; or

(b) a research association, university, college or other institution, notified under clauses (ii) or (iii) of sub-section (1) of section 35 of the Income Tax Act, 1961.

falling under Heading 9981,

Provided that the research association, university, college or other institution, notified under clauses (ii) or (iii) of sub-section (1) of section 35 of the Income Tax Act, 1961 is so notified at the time of supply of the research and development service.”

[Amit Agrawal]

Kindly elaborate your point/s of doubt please. Are your concerned about chargeability of 'R&D Services' or 'Sample' given on free of charge or both? Or your query is about exemption? 

[Shilpi Jain]

Is your customer a related party? Is there a consideration charged for this? Need more details to guide.

[PRAVIN TALEGAONKAR]

Hi,

Customer is not related party.

Regards 

Pravin Talegaonkar

AI Summary

GST applicability on research and development services: exemption when funded by government or notified research institutions, subject to notification. A new exemption entry exempts research and development services when consideration is received as grants supplied by a government entity or by a research association, university, college or other notified institution, provided the institution is notified at the time of supply. The factual enquiry concerns whether product development charges are consideration or grant-funded and whether free samples form part of a taxable supply absent that exemption.