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TMI BlogGST on Component replacementX X X X Extracts X X X X X X X X Extracts X X X X ..... GST on Component replacement X X X X Extracts X X X X X X X X Extracts X X X X ..... ht be used in the equipment as replacement during repairing. The other components which are not used / replaced during repairs are taken back to the premises of XYZ. Can XYZ initially send all the components at the premises of PQR without charging GST and to the extent of component, which is replaced, will issue a Tax Invoice to PQR? Or any other correct method to be followed? Reply By KASTURI S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ETHI: The Reply: Q. Can XYZ initially send all the components at the premises of PQR without charging GST and to the extent of component, which is replaced, will issue a Tax Invoice to PQR? Or any other correct method to be followed ? Ans. Yes. Initially, XYZ can send all the components at the premises of PQR without charging GST. For more clarification, pl. go through Board's circular no.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /10/2017-GST, dated 18-10-2017 Reply By Kaustubh Karandikar: The Reply: Yes Kasturi sir, i also thought of taking shelter of this circular. However, in this circular if you observe the example given of jewellary, the intention of the authorities seems to be to allow such transaction where there is a sale involved. In the given case, the objective is to repair the equipment and replacement of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e component is incidental. Can the department object on this ground? Reply By KASTURI SETHI: The Reply: Dear Sir, In my view, the scenario explained in the query, is covered by the Board's circular. Moreover, in case you are not satisfied with the circular, Rule 55 (4) of CGST Rules clearly covers the scenario. Delivery challan is meant for such purposes. Reply By Shilpi Jain: The Reply: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Yes agree this is a case of no supply and can be done on a DC. Or even done as a sale on approval basis and once incorporated can be onsidered as approved sale and invoiced. The remaining can be again sent on DC Reply By ABHISHEK TRIPATHI: The Reply: Dear Kaustubh Sir, Both the experts are right. Just a little elaboration: The activity of sending/taking goods (except Sch I) do not constitute s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply as the said activity does not fall within the scope of section 7 of the CGST Act as there is no consideration at that point in time. Since such activity is not a supply it cannot be taxable.
Relevant provision - S. 31(7) and R. 55
The above inference is drawn from the department circular for 'sale on approval basis' (export cases). X X X X Extracts X X X X X X X X Extracts X X X X
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