Yesterday GoI made clarification on material supply against warranty. There were doubts whether Supply of free items will be taxable ? To supply on Challan or Invoice ? ITC to be Reversed or not ? GoI replied :
"Free supply during warranty is not taxable if GST has already been paid on warranty charges. ITC reversal not reqd. To be sent on challan."
Points to be taken care:
1. Mention warranty (including extended warranty, if any) period on Invoice, retain any warranty related brochures or any document.
2. When issue material free of cost, mention Original Invoice No. and date on Challan.
Thanks.
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