warranty claims

[SAKTHIVEL K]

A foreign supplier supplied parts to India. Importer in India raised claim towards quality issue. Is claim received liable to service tax under import of service (RCM)?

[vk agarwal]

This is nothing but reduction in price of goods . IGST has already been paid on full value at the time of import. Hence, it seems no IGST is payable under reverse charge on claim received

[SAKTHIVEL K]

Thank you so much Sir.

AI Summary

Import price adjustment: warranty claim treated as price reduction so no reverse charge IGST applies on the claim. The claim is classified as a reduction in the price of imported goods rather than an import of service; since IGST was paid on the full value at import, no IGST is payable under the reverse charge mechanism on the received claim.