Case-1- Circular No. 47/21/2018-GST Dated 8th June 2018
Whether moulds and dies owned by Original Equipment Manufacturers (OEM) that are sent free of cost (FOC) to a component manufacturer is leviable to tax and whether OEMs are required to reverse input tax credit in this case?
It is further clarified that while calculating the value of the supply made by the component manufacturer, the value of moulds and dies provided by the OEM to the component manufacturer on FOC basis shall not be added to the value of such supply because the cost of moulds/dies was not to be incurred by the component manufacturer and thus, does not merit inclusion in the value of supply in terms of section 15(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act for short).
However, if the contract between OEM and component manufacturer was for supply of components made by using the moulds/dies belonging to the component manufacturer, but the same have been supplied by the OEM to the component manufacturer on FOC basis, the amortised cost of such moulds/dies shall be added to the value of the components. In such cases, the OEM will be required to reverse the credit availed on such moulds/ dies, as the same will not be considered to be provided by OEM to the component manufacturer in the course or furtherance of the former’s business.
Case-2- Tejas Constructions & Infrastructure (P.) Ltd. 109 taxmann.com 311 (AAR – MAHARASHTRA)
Where applicant (contractor) was awarded works contract by contractee for construction of a factory building and as per agreement cement, etc. required for work will be supplied by contractee and further applicant will be paid GST on entire value of contract and after payment of GST, value of materials supplied by contractee would be deducted and balance amount will be paid.
As per section 15- any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both shall be included in the value of taxable supply. In such case, tax is payable on entire contract value without deducting value of cement, etc. provided by contractee. Followed-M/s. N.M. Goel & Co. v. STO 1990 taxmann.com 1352 (SC) on 28 October, 1988 Equivalent citations: 1989 AIR 285, 1988 SCR Supl. (3) 657
Case-3-  110 taxmann.com 189 (AAR – KARNATAKA) Hical Technologies (P.) Ltd., In re
Facts-The applicant a private limited company is engaged in the supply of goods and services and are basically a job worker. They are proposing to undertake a job work activity for WIPL based on the purchase orders. The job work involves assembly, integration and testing of converters. Contract is to supply a manufactured product, for purpose of which, certain physical inputs of ‘critical components’ are provided ‘free of cost’ by WIPL, while non-critical (ancillary) components are to be arranged by applicant and that both these components are to be assembled together using labour of applicant to get the final product.
Held: The value of the goods provided by WIPL would not form the part of the value of the supply and must be excluded while valuing the supply.
Case-4-  103 taxmann.com 91 (AAAR-KARNATAKA) Nash Industries (I) (P.) Ltd.
Facts-Applicantis a manufacturer of sheet metal pressed components and supplies to industrial customers like Automotive, Banking Hardware, Power Protection, Alternate Energy etc. The tools required to manufacture these components were designed and manufactured by Appellant. Such manufactured tools are billed to the customer and the payment is received for the same but the tools are retained by the Appellant for the manufacture of components.
Observation-. We need to examine whether the price paid by the customers is the sole consideration for the supply made by the Appellant. For this purpose, it is necessary to understand the contractual arrangement between the Appellant and their customers to see whether the scope of the supply mandates that, the Appellant is to incur a cost for the manufacture and use of the tool but the same has been supplied by the customer free of charge.
Held: On going through the above terms and conditions of the contract between the Appellant and DICV, it is evident that the Appellant is required to use DICV Owned Tools concerning the part to be manufactured with the tool. In such a case, the value of the tools, which has already suffered tax and supplied FOC to the Appellant, is not required to be added to the value of the components supplied by the Appellant.
Case-5-  104 taxmann.com 420 (AAR – CHHATTISGARH) Navodit Agarwal
Facts-The Applicant, Shri Navodit Agrawal is a transporter in few cement companies and is engaged in transporting Cement/Clinkers of Shree Raipur Cement, Baloda Bazaar. Pursuant to the oral agreement between the aforesaid parties, Shree Raipur Cement proposed that while transporting their cement/clinkers, diesel required would be provided by Shree Raipur Cement. Applicant seeks clarification as to whether diesel cost in respect of transportation is to be included or excluded while charging GST on freight amount.
Held: Diesel so provided by the service recipient to the applicant for use in trucks/vehicles of the applicant forms an important and integral component of this business process, without which the process of supply of cement can never get materialized. Thus from the above legal provisions discussed above, it gets amply clear that any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both is includible in value.
Case-6-GVS Projects (P.) Ltd.,  117 taxmann.com 911 (AAR – ANDHRA PRADESH)
The applicant stated that they are receiving materials such as Power Transformers 100 Sqmm Conductor & Station Transformer from the Contractee and the value of such materials is recovered from their RA bills issued on cost recovery basis by the Contractee. Since APSPDCL and APEPDCL being the Contractees are recovering the cost of the materials that are used/consumed in the services provided to them by the applicant from the R.A. Bills issued, such cost recovered is to be included in the taxable value of the supply.
Case-7-Lear Automotive India (P.) Ltd.  100 taxmann.com 311 (AAR – MAHARASHTRA)
In the present case, the Applicant and its customers are not related parties. The only question which requires examination is whether price paid by the customers is the sole consideration for the supply of parts made by the Applicant. In this regard, providing of the tool which is in the domain of the receiver of the supply as per the contractual terms cannot said to be non-monetary consideration provided by the receiver of the supply to the provider of the supply since upon paying the tool development charges/ the customers are not incurring any expenses, which the Applicant was liable to incur. Further, the ownership in the tool remains with the customers and the development of tool was always meant to be borne by the customers. Thus, Section 15(2)(b) of the CGST Act 2017 will not be applicable in the facts of the present case and the value of the supply of final goods should be based on transaction value as provided under Section 15(1) of the CGST Act 2017.
Case-8-Pulluri Mining & Logistics (P.) Ltd.,  117 taxmann.com 917 (AAR – ANDHRA PRADESH)
Contention of Applicant
The applicant’s claim is that as per the work order issued by the service recipient, HSD oil is required for heavy equipment & vehicles will be under the scope of the service recipient and issued on free of cost basis from service recipient’s storage tank.
In the instant case, the service recipient i.e., M/s. Sree Jayajyothi Cements Private Limited is providing diesel to the equipments and vehicles used by the applicant for executing the mining contracts at different places stipulated in the work order. Diesel so provided by the service recipient to the applicant for use in the equipments and vehicles of the applicant forms an important and integral component of this business process, without which the process of excavation of limestone at different mines, transportation and delivery of Limestone to Yanakandla Limestone Hopper belonging to the recipient. As per Section 15(2)(b) of CGST Act, the value of supply includes any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both;
Case-9-Rajasthan Rajya Vidyut Prasaran Nigam Ltd.  108 taxmann.com 516 (AAR- RAJASTHAN)
In the present case where the deposit work is undertaken by the consumer/intending agency under supervision of the applicant, the cost is directly incurred by the consumer/intending agency, still the applicant is exclusively liable and responsible for modification/alteration of the transmission infrastructure as per Electricity Act, 2003 so as to comply with the grid standards and that’s why the work is mandatorily to be executed under the supervision of applicant. Thus as per the above discussions, since the applicant is liable and responsible for such work, therefore, according to section 15(2)(b) of GST Act, 2017, the cost of such asset/infrastructure incurred by the consumer/intending agency is to be included in the value of supply.
Comment-A Concept which has been a bone of contention and yet to settle down but a process which might help in understanding the issue can be as follows:
- Analyze the Contract between the two parties for the work to be executed
- Arrive at the scope of work of the contract and the activities to be carried out by the supplier
- Arrive at the activities integral for the work to be executed.
- Ascertain who’s i.e. supplier or recipient, is responsible to carry out which activity out of the above activities as per the contract. If nothing specific has been mentioned in the contract, then it would be deemed that all such activities are to be executed by the supplier himself.
- Once ascertained, identify whether amount for such activities has been incurred by the person responsible to execute the same and if not then give appropriate treatment as per the provisions of section 15(2)(b).