Gst applicability on transfer of material development cost

Akansha jain (CA) (156 Points)

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?