gst impact on parts replacement

[Madhavan iyengar]

A company has 2 regd units one in Karnataka another in gujarat for manufacture of parts

Gujarat unit supplies to customers across india the parts. there is a warranty clause for free replacement and repairs of the parts supplied across india ( as the replacements of warranty and repairs are included in original supply price of the part)

The customers who have purchased the parts form gujarat regd location will go to karnataka unit if there is any issue in the parts and will send the parts for repairs and get the repair done and then get back the repaired part back or get free replacement under warranty from karnataka unit

query:

is there any gst impact on Karnataka unit to the customers of Gujarat for rendering services of repairs and replacement of parts

[YAGAY andSUN]

In this matter, repair would be done as per the warranty clause and consideration is missing, therefore in our view GST may not be applicable.

[KASTURI SETHI]

I support the views of M/s.Yagay and Sun, Sirs. Here is case law.

IN RE: M/S. SARASWATHI METAL WORKS [2018 (11) TMI 282 - AUTHORITY FOR ADVANCE RULINGS, KERALA]

_______

I am also of the view that it is also not hit by Schedule-1 (Point No.2) since the goods are tax paid.

[Ganeshan Kalyani]

I am also of the same view that gst is not applicable.

AI Summary

Warranty repair and replacement treated as non-taxable under GST where no extra consideration is charged and goods are tax paid Where warranty repairs or replacements are performed without additional consideration because they are covered by the original sale price, those services are not a separate taxable supply under GST and therefore GST does not apply, particularly where the goods have already borne tax on the original supply.