Understanding Supreme Court judgment on sales tax on credit note issued to dealers for warranty replacements
In a 106 pages long verdict, the Supreme Court has decided whether a credit note issued by a manufacturer to a dealer of automobiles in consideration of the replacement of a defective part, using spare parts from dealer’s own stock or from an open market, in the automobile sold pursuant to a warranty agreement being collateral to the sale of the automobile, will be exigible to sales tax.