24 January 2019
XYZ(Manufacturer) supplying goods to customers on payment of GST. Subsequently, goods are supplied on FOC basis, 1) During warranty period if found defective or damaged or 2) After warranty period if found defective, damaged or short supplied. a) Whether XYZ is required to pay GST on goods supplied on FOC basis under both the situations i.e. before and after warranty period? b) How to arrive at the value for FOC supply c) Whether proportionate ITC is required to be reversed if GST is not required to be paid on FOC supply?
24 January 2019
Goods are not supplied free. During warranty period, the manufacturer is bound to replace defective goods, and such supply is part of the earlier paid supply. No GST is required to be paid, and no input reversal is required as the goods are being supplied in course or furtherance of business. I have no able to understand the circumstances as why the goods are being supplied FOC basis after warranty period, so refraining from making any comment.
CAclubindia
