Being Distributor - How to deal with GST loss with FOC products and 2 yrs gurantee with advance pay
Refer to subject, we are authorized distributor. Since last around 1 years company is providing some LED lights as FOC goods with billing at Rs. 1 in order to compete with the market price of fast moving led lights. For example if we ordered led lamp 7W and Led lamp 9W, company will be providing the led lamp 35W as FOC without decreasing the prices of LED lamp 7W and 9W.
By doing this type of business we have been incurred tax loss during replacement of material in warranty period that is 2 years decided by the company. We have been supplied more than 2000 led lights and other domestic appliances as FOC. Please refer attached invoice as sample for your further information.
Please assist us how we can communicate with these tax losses. Apart from this issue as per company there is guarantee of 2 years of each LED items but company is demanding all balance payment forefront since we have purchased of around 1.47 crore worth of LED material from the company so far within 1.5 years who will be liable for the warranty if all balance amount will be paid in advance, in absence of payment company is providing irrelevant debit notes.
Please assist what legal action we can take in this matter.