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Gst applicability on transfer of material development cost

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CA
156 Points Posted on 19 September 2023
Company A has assigned a task of formulating a special chemical to Company B. In this process ,company B has incurred huge expenses but was not successful in developing the final output. Now Company B wants to transfer the cost incurred during this process to Company A. Will GST be applicable on this transfer on total amount of cost incurred?
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On 19 September 2023 at 14:25 Report
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"Do the Right Thing...!!!"
128152 Points Posted on 19 September 2023
Is there Company A accept the charges...?
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On 19 September 2023 at 15:17
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CA
156 Points Posted on 19 September 2023
Yes, expenses are being transferred by mutual consent
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On 19 September 2023 at 15:26
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"Do the Right Thing...!!!"
128152 Points Posted on 19 September 2023
Then, You can transfer the cost with GST.

Yes, Total cost or actual cost like materials or Materials with Labour cost and anything...
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On 19 September 2023 at 15:30
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CA
156 Points Posted on 19 September 2023
So, Gst will be applicable on transfer by Company B to A?
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On 19 September 2023 at 15:37
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"Do the Right Thing...!!!"
128152 Points Posted on 19 September 2023
Yes, Definitely.

All charges (materials and services) you received (or applied) with GST or without GST will transfer as per mutual understanding then these all transfers levied with GST.
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On 19 September 2023 at 15:44
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Account
408 Points Posted on 20 September 2023

Please clarify.....How's transaction is going on??

If Company A transfers the total cost amount to Company B as Compensation than I think GST will not be applicable on transaction made by Company A to B.

 

For more  clarity...please refer circular no  Circular No. 1  7 8../1 0../ 20 2 2..-GST dated 03.08.2022 (attached).

 

Please correct me, if I am wrong

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On 20 September 2023 at 13:15
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Profession Business
28207 Points Posted on 23 September 2023
Hst on transfer on material cost.
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On 23 September 2023 at 08:12


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