Excise duty on under Warranty replacement

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..... Excise duty on under Warranty replacement
Query (Issue) Started By: - Dhananjay Kadam Dated:- 22-5-2015 Last Reply Date:- 24-6-2015 Central Excise
Got 2 Replies
Central Excise
We are the manufacturer of SPM's, we provide warranty for 1 yr against supply of goods to customer, whereas warranty supply is considered / value added in transaction value of original supply of machine. N .....

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..... ow, if part gets failed during warranty of Machine & need to replace free of Cost. whether Excise duty is payable on the free replacement ? which cost is included in the transaction value of original supply of Machine. Experts comments ! Reply By Mehul Pandya: The Reply: I am assuming that the part (that is damaged can be repairable), If the damaged goods bought into the factory ,assuming that .....

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..... duty has been paid at the time of removal,for remade, reconditioned or for any other reason(repair) then you are entitled to claim such Cenvat Cr which have been paid by you at the time of removal, as under excise such credit can be availed on the basis of your self invoicing. 2. Assessee is liable to levy "Amount equal to Cenvat Credit taken" at the time of removal of such good.(In invo .....

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..... ice on re-removal of such repaired good, you should mention on your invoice "Amount payable in terms of second part of Rule 16(2) of CER,2002" instead of "ED payable") 3. Due to emergence , fresh good is given to the buyer then, on such good ED is to be levied. Read more at: http://www.caclubindia.com/forum/free-replacement-272859.asp Reply By PARTHASARATHY V: The Reply: Nor .....

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..... mally the machine cost may include the warranty parts cost also in built with the price from 2% to 5%. This parts of the warranty re-placement can be cleared free of cost with Nil ED provided you have to refer the OEM Invoice No and if the machine is having any serial Number. But also pl ensure that the Free Part for warranty may not exceed @2%. In addition to this, you please keep the Costing of .....

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..... the machine ready with you, in case if the department ask the warranty cost inclusion details in the OEM
Discussion Forum - Knowledge Sharing .....

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