Circular No. 195/04/2023

1. Replacement or repairing services provided by original equipment manufacturer:

If no additional consideration is charged from customer, then no GST is chargeable and also no reversal of ITC is required to be made.

2. Replacement of parts by distributor:

• Distributor uses his stock or purchase from third party and charges consideration from supplier:

GST would be payable on such supply by the distributor to the manufacturer.

• Distributor uses his stock received from manufacturer and manufacturer issues a credit note:

Tax liability may be adjusted by the manufacturer provided that the said distributor has reversed the ITC availed against the parts so replaced.                                 

Further, if no additional consideration is charged from customer, then no GST is chargeable and no reversal of ITC is required to be made by distributor.

3. Repair services provided by distributor:

It would be considered as supply of service by distributor to the manufacturer accordingly GST would be payable on such supply of service by distributor.

4. Extended warranty to the customers

a) Provided at the time of original supply:

Such extended warranty would become part of value of composite supply and GST would be payable accordingly.

b) Provided after the original supply:                    

Considered as a separate contract and GST would be payable by the service provider.