Input tax credit on warranty replacements clarified: no GST or ITC reversal where no separate consideration is charged. Replacement parts and repair services supplied during a warranty period without separate consideration are included in the value of the original taxable supply, so no additional GST is chargeable and the manufacturer need not reverse ITC; if additional consideration is charged, GST applies. Distributors providing warranty services without charging customers do not incur GST on that activity, but GST and ITC consequences follow where distributors invoice manufacturers or where credit notes and ITC reversals are involved. Extended warranty sold with the original supply is part of the composite supply; sold later it is a separate taxable supply.
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Provisions expressly mentioned in the judgment/order text.
Input tax credit on warranty replacements clarified: no GST or ITC reversal where no separate consideration is charged.
Replacement parts and repair services supplied during a warranty period without separate consideration are included in the value of the original taxable supply, so no additional GST is chargeable and the manufacturer need not reverse ITC; if additional consideration is charged, GST applies. Distributors providing warranty services without charging customers do not incur GST on that activity, but GST and ITC consequences follow where distributors invoice manufacturers or where credit notes and ITC reversals are involved. Extended warranty sold with the original supply is part of the composite supply; sold later it is a separate taxable supply.
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