GST on Warranty Products: You will benefit from this in those situations when any of your new products get damaged in warranty. Let us know how to get its benefit…
You must have come across such situations many times when you bought a new product and it got spoiled within no time. Usually companies give some time warranty on new products. Warranty means that if there is any defect in the product during its validity, then the company will repair it. A recent decision of the government regarding such matters is going to help the customers a lot.
Decided because of
In fact, many such cases had come to the fore, in which the companies repaired the warranty product and gave it back to the customer, but the company collected service tax i.e. GST from the customer. Now companies will not be able to do this. The government has made it very clear in this matter that companies cannot take any kind of money from the customers instead of replacing the spare parts to fix the product under warranty.
GST Council took the decision
A decision in this regard was taken in the recent meeting of the GST Council. GST Council is the paramount body to take decisions from slab to rate under the new indirect tax regime. The GST Council had clarified in the recent meeting that if companies are replacing parts of a product free of cost under warranty, then they cannot charge GST in such cases. Now the decision of the Council has been notified by the Central Board of Indirect Taxes and Customs ie CBIC.
CBIC said this
CBIC has said in the latest order that the full cost of spare parts which are replaced in warranty products is already recovered from the customer while selling the original product. Under warranty, the companies themselves have to replace the spare parts if required to repair the concerned product. In such a situation, companies cannot take money from customers in the name of GST.
Customers across the country will be helped
CBIC has said that if the company charges any additional replacement charge or service charge for replacement of parts, then GST may be applicable. This order of CBIC is expected to be of great help to the customers across the country. At the same time, the mistakes made by the companies and their service centers will also be curbed.
