Goods received for repair from customer

[SURYAKANT MITHBAVKAR]

We have manufacture pharma machine registered under GST

Our customer has sent some part for repairing under delivery Challon

NOW the repairing work will take place at our vendor place where goods to be delivered by us.

We have sent the same goods on our letter while declaring value for transit purpose along with the customer delivery Challon to that vendor who is doing repairing job.

After repairing job is done that vendor deliver goods on challon with their service invoice which is raise in our name.

After receiving the repaired goods from vendor we will raise our service invoice to customer as agreed and send goods to customer along with their challon copy.

Please advice whether the above procedure under GST is correct or we have to any other precaution under the above procedure.

Please note that we have not issue any challon when the goods send to our vendor for repairing. In short we have not enter any where in our stock.

Secondly sometimes we receive goods for repairing which is done without any charge to customer. In this case we have not raise any invoice to our customer. Is it allow under GST Law if yes under which notification pl advise.

[Himansu Sekhar]

Question 22: How will the defective parts be sent to the mother warehouse/repairing centre for repair by the downstream repairing centres? What is the tax liability?

Answer: The defective parts shall be sent for repair on a delivery challan accompanied by such e-way bill as may be prescribed. GST shall be chargeable on the repair amount, including the cost of parts, charged by the repairing centre.

Question 21: An Original Equipment Manufacturer (OEM) has an obligation to provide repair services to their customers in the warranty period. This activity is outsourced by OEM to ‘D’, who bills the OEM for the services he provides to the customer. What is the tax liability of ‘D’?

Answer: ‘D’ is providing service to the OEM. GST is payable on the value of any supplies made by ‘D’ to OEM i.e. in respect of bills raised by ‘D’ on the OEM.

Question 20: What would be the tax liability on replacement of parts (no consideration is charged from a customer) under a warranty and whether the supplier is required to reverse the input tax credit?

Answer: As parts are provided to the customer without a consideration under warranty, no GST is chargeable on such replacement. The value of supply made earlier includes the charges to be incurred during the warranty period. Therefore, the supplier who has undertaken the warranty replacement is not required to reverse the input tax credit on the parts/components replaced.

[Himansu Sekhar]

A. We have manufacture pharma machine registered under GST.Our customer has sent some part for repairing under delivery Challan

NOW the repairing work will take place at our vendor place where goods to be delivered by us.

We have sent the same goods on our letter while declaring value for transit purpose along with the customer delivery Challon to that vendor who is doing repairing job.

After repairing job is done that vendor deliver goods on challon with their service invoice which is raise in our name.

B. After receiving the repaired goods from vendor we will raise our service invoice to customer as agreed and send goods to customer along with their challan copy.

Please advice whether the above procedure under GST is correct or we have to any other precaution under the above procedure.

Please note that we have not issue any challan when the goods send to our vendor for repairing. In short we have not enter any where in our stock.

C. Secondly sometimes we receive goods for repairing which is done without any charge to customer. In this case we have not raise any invoice to our customer. Is it allow under GST Law if yes under which notification pl advise.

[Himansu Sekhar]

Please issue a Challan

AI Summary

GST on repair services: repair consideration including parts is taxable; warranty replacements without charge are not taxable. Goods sent to third party repairers must be accompanied by a delivery challan and any prescribed e way documentation; GST is payable on the repair consideration charged by the repairer, including parts. Repairers should invoice the contracting manufacturer/OEM, which may then invoice the customer. Parts provided free under warranty are not subject to GST and do not require reversal of input tax credit, because the original supply value covers warranty replacements.