This circular updates Circular No. 195/07/2023-GST on GST liability and ITC for warranty and extended warranty cases. Clarifications address the GST treatment of parts and goods replaced under warranty and scenarios involving distributors replacing goods.

For goods replaced under warranty, the same GST and ITC rules apply as for parts replacements. The earlier circular’s guidance on parts also covers full goods replacements. Additionally, when a distributor replaces goods from their stock and later receives replenishment from the manufacturer, no GST or ITC reversal is needed for the replenished goods.

Regarding extended warranties, if the warranty is provided by a different supplier than the goods, it is considered a separate supply, not part of the goods’ composite supply. Extended warranties sold after the original supply are