TaxTMI 
TaxTMI 
XYZ(Manufacturer) supplying goods to customers on payment of GST. Subsequently, goods are supplied on FOC basis, 1) During warranty period if found defective or damaged or 2) After warranty period if found defective, damaged or short supplied. a) Whether XYZ is required to pay GST on goods supplied on FOC basis under both the situations i.e. before and after warranty period? b) How to arrive at the value for FOC supply c) Whether proportionate ITC is required to be reversed if GST is not required to be paid on FOC supply?
GST on FOC Supply
24 Jan 2019 
3 Replies 
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GST on warranty replacements: parts supplied under warranty are not taxable and do not require input tax credit reversal.
Parts or goods provided without consideration under an express warranty are treated as free supply arising from the warranty promise and are not subject to GST; the original supply's consideration is understood to include warranty-related repairs or replacements, and therefore the supplier need not reverse input tax credit on parts/components replaced under warranty. (AI Summary)
Parts or goods provided without consideration under an express warranty are treated as free supply arising from the warranty promise and are not subject to GST; the original supply's consideration is understood to include warranty-related repairs or replacements, and therefore the supplier need not reverse input tax credit on parts/components replaced under warranty. (AI Summary)