TaxTMI 
TaxTMI 
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.
FOC supply to customer
13 Feb 2018 
10 Replies 
29651 Views Asked by
FOC supply GST treatment: free warranty replacements usually non taxable while ITC reversal depends on supply characterisation.
GST on free of cost supplies depends on whether the transfer is characterised as a taxable supply; specified activities are treated as supply even without consideration, making GST and ITC consequences applicable. Warranty replacements provided without charge are generally not taxable because original consideration is treated as covering warranty costs, and suppliers need not reverse ITC on parts replaced under warranty; by contrast, non warranty free supplies that qualify as taxable supplies require ITC reversal or adjustment as per supply characterization. (AI Summary)
GST on free of cost supplies depends on whether the transfer is characterised as a taxable supply; specified activities are treated as supply even without consideration, making GST and ITC consequences applicable. Warranty replacements provided without charge are generally not taxable because original consideration is treated as covering warranty costs, and suppliers need not reverse ITC on parts replaced under warranty; by contrast, non warranty free supplies that qualify as taxable supplies require ITC reversal or adjustment as per supply characterization. (AI Summary)