Vat on warranty parts

[MUKESH DAS]

Dear Sir,

         I am working in a Honda four wheeler dealership in Delhi. My queries is warranty parts is taxbale or tax free sale

AI Summary

Warranty parts taxability: competing views affect VAT treatment and input tax credit entitlement in dealer transactions under VAT law
Whether warranty replacement parts are a taxable sale under VAT law is disputed: one view holds warranty replacements are not a sale and thus not subject to VAT, with no input tax credit claimable on spare purchases; an alternative view cites judicial authority treating warranty parts as taxable supplies, which would subject replacements to VAT and affect input tax treatment.