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Applicability of sales tax on goods send on warranty

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Arumugam

Finance Executive

21 Points Posted on 29 April 2012

Dear Colleagues,

I want to know about the sales tax / vat liability on goods despached on warranty basis.

I have the below doubts.

VAT / Sales Tax to be charged when the goods are despatched on warranty??
Is invoicing is compulsary?? whether we can despatch goods of warranty items without invoice??
If yes, then what are the documents needed for despatching goods on warranty without invoice??
If invoice is to be made and there is no liability of VAT/Sales Tax then, how to show in Invoice the same??

If any one knows, i will be much obliged to hear from you.

Thanks in advance.

Regards,

S.Arumugam.

Replies (1)

MJ Krishnamurthy

ACCT(Retd)

5757 Points Posted on 29 April 2012

Mr Armugam,

Under all VAT Acts in India provision is made to despatch goods for purposes other than sale also like warranty replacements,repair, job work, exhibitions,samples,stock transfers etc.. In all Acts there is a statutory( like form 505 in Karnataka) delivery note forms to be issued along with the despatched goods. The letter of complaint from your customer,your reply with delivery challan etc should also accompany the goods.There is no need to raise an invoice. In some states arrangement is made for dealers to obtain these forms on-line also

Recently, in some states,instructions have been issued to all dealers in specific goods to submit certain information on all movements of goods on-line(e-sugam etc) and keep a copy of such print out extracted along with the goods.

Compliance with these provisions would meet the requirement.

MJK