Amortized cost of tools cannot be added to arrive at value of goods supplied for GST

In re M/s. Nash Industries (I) Pvt. Ltd (GST AAAR Karnataka)

The appallate authority for advance ruling has set aside the rulings passed under section 98(4) of the CGST Act 2017 vide NO. KAR ADRG 24/2018 dated 25/10/2018 i.e. Contention of the appellant is allowed based on examination of the contract and purchase orders furnished.

Question- Whether the amortized cost of the tools is to be added to arrive at the value of the goods supplied for the purpose of GST under Section 15 of the CGST Act, 2017 read with Rule 27 of CGST Rules, 2017?

AAAR set aside the ruling of the AAR and hold that the cost of the tools supplied by the OEM customer on FOC basis to the Appellant is not required to be added to the value of the components supplied by the Appellant. We emphasize that the ruling given by us in this appeal proceeding is based on examination of the contract and purchase orders furnished by the Appellant in the case of their customer M/s Daimler India Commercial Vehicles Pvt Ltd. This ruling will apply to other contracts entered into by the Appellant only if the terms and conditions contained therein are the same as those contained in the contract placed before us.

FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, KARNATAKA

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