TaxTMI 
TaxTMI 
2023 (6) TMI 1296
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....reinafter referred as "the applicant") and are manufacturers and suppliers of Railways locomotive parts. 2. The applicant has submitted application for Advance Ruling dated 06.09.2022 enclosing dully filled Form ARA-01 (the application form for Advance Ruling) along with annexure and attachments. The applicant in his application has sought advance ruling on following question- "As to whether if goods are supplied as free replacement under guarantee period without any consideration, what would be the tax liability under GST." 3. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applica....
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.... firm will be liable to make free replacement to the depot where failure has been reported within reasonable time". (copy of the purchase order and specification(s) of a sample item. Modified Elastomeric Pad to RDSO drg. No. WD-95005/S-1, Alt.7 and RDSO Specification No. WD-20-Misc-95[Rev.-31 of March 2003, Amendment 6 of Sept, 2016 is attached). 3.6 That under guarantee and free replacement no consideration shall be chargeable from the buyer against the supply of replaceable goods, and as such no GST could be charged and payable to the Govt. The replaced items shall be of NIL value. In as much as the consideration for replaced goods has already been included as and when the original supply was made for the first time to the Indian....
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....ling was forwarded to the Jurisdictional GST Officer to offer their comments/views/verification report on the matter. The Deputy Commissioner, CGST & Central Excise Division, Lucknow-II vide her letter dated 12.10.2022 submitted the desired comments/view/verification report on the question raised in the Advance Ruling Application is as under:- (a) Party is registered with the GSTIN-09AABCP7647L1ZU w.e.f. 01-07-2017 as Manufacturer. (b) Party's registered address is E-7, Talkatora Industrial Estate, Lucknow-226011. (c) Party is regular taxpayer and has filed all returns up to August 2022. (d) Party is manufacturing goods falling under Chapter Heading 86079920 (PARTS OF RAILWAY OR TRAMWAY LOCOMOTIVES OR ROL....
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.... through the Form GST ARA-01 filed by the applicant and observed that the applicant has ticked following issue on which advance ruling required- "As to whether if goods are supplied as free replacement under guarantee period without any consideration, what would be the tax liability under GST." 9. In the letter/purchase order dated 21-04-2021 issued by the Principal Chief Material Manager, South Central Railway to M/s Prag Industries (India) Pvt. Ltd. Lucknow, issued vide P.O. No. 38201145101516 dated 30.04.2021 wherein warranty clause is mentioned at terms and condition No. 09 which is under: "Warranty Clause Guarantee for a period of 30 months from the date of supply. 10. Supply to Indian Railways are classifiable under ....
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....tivities as mentioned below shall be treated as supply even if made without consideration. 1. Permanent transfer or disposal of business assets where input tax credit has been availed on such assets. 2. Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business However, gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both. 3. Supply of goods (a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or (b) by an agent to his principal where the agent und....
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.... has been decided in the AAR, Chennai, Tamil Nadu vide Advance Ruling No. TN/07/ARA/2022 Dated 28.02.2022 in case of SOUTH INDIAN FEDERATION OF FISHERMEN SOCIETIES. Relevant part of para 8.1 is as under: 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 replacement of the goods and service rendered during the warranty period without consideration does not attract GST separately. We also find that Extract from CBIC -GST SECTORAL SERIES IT/ITES (page no 5) Question 20: What would be the tax liability on replacement of parts (no consideration is ch....