Supply of Goods under Warranty., VAT + CST

[Manish Sulakshane]

Can you please clarify what would be the tax liability on replacement of parts (no consideration is charged from a customer) under a warranty and whether the supplier is required to reverse the input tax credit?

Please also clarify what procedure is to followed?? How do we raise the Invoice as well as Way bill if the Total Invoice value exceeds ₹ 50000/-?

Posts / Replies

[Ganeshan Kalyani]

You can raise delivery challan and eway bill can be generated for the same.

[YAGAY AND SUN]

If the warranty is included in your transaction value and this is reflected from your contract/agreement/POs/Cost sheet then you need not to pay the GST, otherwise you need to pay either GST or reverse the ITC on such transactions. Delivery Challan along with E-Way Bill is required for movement of goods provided threshold limit is not crossed.

[Ganeshan Kalyani]

Yes, Sir.