GST on Free of Cost Replacement for failed Spares
Query (Issue) Started By: – Ramesh C Behera Dated:- 12-9-2017 Last Reply Date:- 14-9-2017 Goods and Services Tax – GST
Got 7 Replies
GST
Hi,
We are a Subsidiary of an MNC . Our Parents company supplies Capital Goods to its customers in India. When there is any breakdown capital goods, supplied to said customers, our Parent company send us the spares free of cost paying duty, GST, Freight and clearing charges with an instruction to supply these parts as a replacement of the spares free of cost to the customer.
Please let us know the GST implication on the Free of Cost Supply made by us.
Reply By Rajagopalan Ranganathan:
The Reply:
Sir,
First of all please clarify where your
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dia. They have supplied you the material after paying all the taxes. In fact it was paid by you since it was charged on the invoice raised on you. Now you are supplying those material to customets as free supply. This transaction does not have consideration. Hence in my view GST is not applicable.
Reply By Himansu Sekhar:
The Reply:
Free of cost goods against warranty is not chargeable to gst as in the price charged from the original equipments includes the replacement price and charged gst. If you have taken credit on such item, please reverse the same.
Reply By Ramesh C Behera:
The Reply:
As explained in my previous post, My Parent company is located in Singapore. What ever spares sent to us is custom duty and IGST Paid.
We get the
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