Warranty replacement tax treatment: free-of-charge parts and repairs during warranty not subject to further GST unless extra consideration. Replacement parts and repair services supplied free of charge during the warranty period are covered by the value of the original supply and attract no additional GST; manufacturers need not reverse input tax credit for such warranty replacements or repairs. If additional consideration is charged, GST is payable on that consideration. Distributor-manufacturer interactions depend on the mechanism: distributor invoices manufacturer for parts (taxable), manufacturer supplies parts to distributor free (no GST, no ITC reversal), and credit-note adjustments require reversal of ITC by distributor where applicable.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Warranty replacement tax treatment: free-of-charge parts and repairs during warranty not subject to further GST unless extra consideration.
Replacement parts and repair services supplied free of charge during the warranty period are covered by the value of the original supply and attract no additional GST; manufacturers need not reverse input tax credit for such warranty replacements or repairs. If additional consideration is charged, GST is payable on that consideration. Distributor-manufacturer interactions depend on the mechanism: distributor invoices manufacturer for parts (taxable), manufacturer supplies parts to distributor free (no GST, no ITC reversal), and credit-note adjustments require reversal of ITC by distributor where applicable.
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