15 December 2018
1. We are in manufacturing of Auto products which are used by various auto industries. For making this Auto Products we have to develop & make Tools/Dies.
2. The sale of Tools/Dies is not included in our main business.
3. We are also exporting the Auto Products.
4. The export party gives us Tool/Dies cost amount in advance separate from regular export sale.
5. We are taking the Input credit on the making of the Tools/Dies.
6. The Tools/Dies physically remains with us as a property of the export party. They are not physically exported outside the country.
7. The export party after the completion of said order (say after 5-10 years) demands the scarp value of the above Tools/Dies.
Our queries are as follows:- 1. Whether we have to consider the sales of Tools/Dies as export sale or treat the whole receipt as indirect income.
2. Are we liable to pay “GST” on the above sale of Tools/Dies? If yes, please give a detail idea as how ?
3. Whether we can show the above tools as our asset and claim the depreciation on the above Tools/Dies
21 December 2018
Cost to develop tools and dies should be treated as composite supply wherein Auto Products are principle supplies. It is advisable to charge the net cost of tools and dies in the export invoice itself, to avoid any confusion.
CAclubindia
