Free replacement of parts of goods under warranty does not attract GST but the tax would be payable if customers are charged for new parts clarifies CBIC.

In a recent meeting of the GST Council, it was decided that free replacement of parts of goods under warranty will not attract GST. However, if the customer is charged for the replacement parts, then GST will be payable on the additional amount.

The reason for this decision is that the cost of the replacement parts is already included in the original sale of the goods. Therefore, there is no need to levy GST on the free replacement of parts.

The following are some key points to note about the GST treatment of free replacement of parts under warranty: -> Free replacement of parts does not attract GST. -> If the customer is charged for the replacement parts, then GST will be payable on the additional amount.

-> The cost of the replacement parts is already included in the original sale of the goods. This decision was made by the GST Council in a recent meeting.