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Gst applicability on transfer of material development cost

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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?
Replies (7)
Is there Company A accept the charges...?
Yes, expenses are being transferred by mutual consent
Then, You can transfer the cost with GST.

Yes, Total cost or actual cost like materials or Materials with Labour cost and anything...
So, Gst will be applicable on transfer by Company B to A?
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.

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

Hst on transfer on material cost.


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