Valuation of Supply — Section 15 of CGST Act— the applicant, seeking an advance ruling in respect of the following questions:

Whether amortized value of the tool received on FOC basis from the customer is required to be included in the value of finished goods manufactured and supplied by the applicant to the customer?

the issue to be decided in present proceeding is whether the goods which are claimed to be supplied free of cost (FOC) would form part of value of taxable supply. It is the case of applicant that the tools that are provided by the customer on FOC would not be included in the value of supply.

Held that—it is clearly indicated that the tools procured by the applicant from third party vendor, are ultimately supplied to customer for which tax invoice is raised and applicable GST has been charged. Thus the absolute ownership of the tools get transferred to the OEM. However the physical possession of the tool remains with the applicant during the manufacturing process or till the time they are removed by the customer from the premises of the applicant. The tools which are supplied to M&M and GM by the applicant in this case are on payment of GST and are further supplied by the customer to the applicant for use in the process of the manufacture clearly indicate that the supply of tool is of goods owned by M&M and GM to appellant which is on FOC basis. And thus the transaction is not covered by the scope of section 15(2) of CGST Act.Lear Automotive India Private Limited [2018] 2 TAXLOK.COM 088 (AAR-MAHARASHTRA)