9911796707
TMI Blog2023 (6) TMI 1296X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 applicant. The applicant has submitted that- 3.1 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted 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 Railways. 4. The applicant has submitted their interpretation of law as under- (1) We app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty 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 ROLLING-STOCK-BOGIES, BISEL-BOGIES, AXLES AND WHEELS, AND PARTS THEREOF) (e) w.e.f. 01.10.2019 rate of CGST & SGST is 6% on the goods mentioned in /Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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 HSN 8607. The applicable rate of GST on the impugned goods is 5% in terms of entry number 241 of Schedule I to the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, till 29.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices 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 undertakes to receive such goods on behalf of the principal. 4. Import of services by a person from a related person or from any of his other establishments outside India, in the course or furtherance of business. 12. The applicant is engaged in supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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 charged from a customer) under a warranty and whether the supplier is required to reverse the input tax credit? Answer: 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 incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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