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HSN or SAC code for tool development charges

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(Querist)
17 May 2021 Hello ,We are manufacturer of precision machined components and some of the cases we charge to the customer for development charges against the use of Tools development and intellectual expertise .In a such cases we raise separate invoice of development charges. We except guidance for using the HSN code or sac code .What we mean to say Is it service or product ? as per GST law .We also need the codes for this .
Thank you
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CA Altamush Zafar

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CA Altamush Zafar (Expert)
17 May 2021 Depends on the term of agreement whether you treat supply of goods and services as composite supply or you treat them as separate supply. If composite then development charges will become part of supply of component otherwise it will be treated as service.
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