TaxTMI 
TaxTMI 
Development Charges and GST
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....evelopment Charges and GST<br> Query (Issue) Started By: - Kaustubh Karandikar Dated:- 10-12-2018 Last Reply Date:- 11-12-2018 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>XYZ is the manufacturer of Product 'A' which attracts 12% GST. To manufacture this product, they require Blocks, Punches etc. which they get it done from outside. XYZ recovers this amount of developing the blocks and ....
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....punches from the customer through tax invoice issued for Product 'A' but shows it separately as 'Development charges' for making blocks and punches. 1) Can XYZ charge the same GST which is applicable for product 'A' in respect of development charges recovered or 2) Need to issue a separate service invoice for development charges and charge the applicable GST? Reply By Ganeshan Kalyani: The Reply:....
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.... As per Section 15 of CGST Act, Development charges added on the face of the invoice shall attract the tax rate applicable to the principal supply. Thanks. Reply By Ganeshan Kalyani: The Reply: If the said charges is collected thru separate invoices then the tax rate applicable to the supply of said service would apply. The standard gst rate is 18%. Thanks Reply By DR.MARIAPPAN GOVINDARAJAN: ....
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....The Reply: GST is applicable. Reply By KASTURI SETHI: The Reply: Dear Sir, Cost of products, namely, blocks, punches etc. is consumed in the cost of product 'A'. XYZ cannot charge the same GST which is applicable for product 'A' . In the same invoice, the rate applicable for development charges can be charged. In a nutshell, correct tax should be paid on both. Reply By Ganesh....
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....an Kalyani: The Reply: Thanks Sri Kasturi Sir for enriching my knowledge.<br> Discussion Forum - Knowledge Sharing ....