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2023 (6) TMI 1296 - AAR - GSTLevy of GST - if goods are supplied as free replacement under guarantee period without any consideration - HELD THAT:- The applicant is engaged in supply of Elastomeric pads without any consideration (free of cost) during the warranty period as mentioned in para 9 of vide P.O. No. 38201145101516 dated 30.04.2021 of Principal Chief Material Manager, South Central Railway to the M/s Prag Industries (India) Pvt. Ltd. It is an admitted fact that the warranty is a promise or guarantee for the goods/services supplied by the applicant. 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 charge 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 Railways. During the warranty period the goods and service have been supplied to customers as free of charge. No separate consideration is charged and received at the time of 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. The issue has been decided in IN RE: M/S. SOUTH INDIAN FEDERATION OF FISHERMEN SOCIETIES [2022 (3) TMI 1299 - AUTHORITY FOR ADVANCE RULING, TAMILNADU] where it was held that the replacement of the goods and service rendered during the warranty period without consideration does not attract GST separately. Thus, GST is not leviable, if goods are supplied as free replacement under guarantee period without any consideration.
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