Warranty replacement credits treated as sale price, with account credit not changing taxability under VAT law.

Consideration received by credit in the dealer spare parts account for replacement of vehicle parts during the warranty period was treated as sale price under the Maharashtra Value Added Tax Act, 2002. The mode of receipt, being account credit rather than cash, did not alter the character of the transaction, and the later utilisation of the credit was irrelevant because the taxable event was the replacement supply itself. The assessee's reliance on a repair-charges precedent was found inapplicable on the facts, as the case concerned replacement of parts under warranty rather than mere repair services. No substantial question of law arose, and the HC sustained the tax treatment below.

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Issues: Whether the credit received in the dealer spare part account from the manufacturer for replacement of spare parts during the warranty period constituted sale price liable to tax under the Maharashtra Value Added Tax Act, 2002, and whether any substantial question of law arose.

Analysis: The activity involved replacement of parts of Maruti vehicles during the warranty period. The amounts were credited by the manufacturer towards the price of the replaced parts. The mode of receipt, namely credit in account instead of cash, did not alter the character of the receipt as consideration for the supply of parts. The manner in which the credit was later utilised was held to be irrelevant, because the taxable event was the replacement transaction itself. The authority relied upon by the assessee on repair charges for compressors was found inapplicable on facts, as the present case concerned replacement of parts under warranty and not mere repair services.

Conclusion: The credited amounts were held to be sale price for replacement of parts and taxable under the Act. No substantial question of law arose, and the appeal failed.

Final Conclusion: The challenge to the tribunal's order was rejected, and the tax treatment adopted below was sustained.

Ratio Decidendi: Consideration received by credit in account for replacement of parts during a warranty scheme is taxable sale price, and the mode of receipt does not change the character of the transaction.

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