FOC supply to customer

[SARAVANAN RENGACHARY]

Dear Sir,

FOC supply does not attract GST as there is no consideration received.

is there any restriction in availing GST input credit on the components/raw materials consumed in manufacturing such FOC supply.

Saravanan.

AI Summary

GST Does Not Apply to Free Supplies; Input Tax Credit Reversal Required Unless for Warranty Replacements A discussion on a forum centered around the applicability of Goods and Services Tax (GST) on Free of Cost (FOC) supplies and warranty replacements. A participant questioned whether GST applies to FOC supplies and if input tax credit (ITC) can be claimed on components used in manufacturing these supplies. Responses indicated that FOC supplies do not attract GST due to lack of consideration, and ITC must be reversed if goods are supplied for free. However, warranty replacements, considered part of the original sale, do not require ITC reversal. Clarifications were also provided regarding transactions between related parties and the treatment of sample goods.