GST on imports, Goods and Services Tax - GST

[Madhavan iyengar]

X Company based in India ( Gujrat) has placed order for tool on Y based in Germany

X will pay Y for the tool in foreign exchange

Y will make the tool and tool will remain in Germany for manufacture of parts for X

Manufactured parts will be sold by Y to X ie it will be imported by X and customs duty and IGST paid by X in India

issues

On tool purchase will X require to pay any duties as tool has never come into india

For parts sold by Y of Germany to X in India how the parts is required to be valued for customs duty purpose

Posts / Replies

[Ganeshan Kalyani]

Cost Insurance Freight (CIF) value or Free on Board (FOB) value. These are two values which is considered for import duty purpose.

[YAGAY andSUN]

In our view, you have to disclose all material facts (refer Rule 11 of the Customs Valuation (Determination of value of imported goods) Rules, 2017) about this transaction to the Customs Department and Customs Department will surely ask you to amortize the cost of the tool on the value of the goods manufactured with the help of such tools and imported such goods into India.