We are the manufacturer of SPM's, we provide warranty for 1 yr against supply of goods to customer, whereas warranty supply is considered / value added in transaction value of original supply of machine.
Now, if part gets failed during warranty of Machine & need to replace free of Cost. whether Excise duty is payable on the free replacement ? which cost is included in the transaction value of original supply of Machine.
Experts comments !
Excise Duty Clarification: Replacement Parts Under Warranty and Cenvat Credit Eligibility Explained A manufacturer of special purpose machines (SPMs) raised a query regarding excise duty on parts replaced under warranty. When a part fails during the warranty period and is replaced free of charge, there is uncertainty about whether excise duty is applicable. One expert, Mehul Pandya, suggests that if the damaged part is repairable and returned to the factory, the manufacturer can claim Cenvat credit. However, if a new part is supplied, excise duty must be levied. Another expert, Parthasarathy V, notes that warranty parts costs are typically included in the machine's price and can be replaced free of duty if properly documented. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
