GST ON SALES OF UNSALABLE RESDYMADE GARMENTS AND FABRICS, Goods and Services Tax - GST

[VIJAY GUPTA]

There was a closing stock of ₹ 20,000.00 of readymade garments taxable@5% and ₹ 100000.00 of fabric as tax free at 30.06.2017 as shown during migration to GST. The dealer received fabrics from factory and converted in readymade garments from job work, hence, no ITC was available during VAT regime. The said stock can be sold st ₹ 5,000.00 only. Now said stock became out of fashion and is not in a condition of sale.

The question is what rate of tax to be charged on such sale and how to show difference, between stock value and sale price, in books of accounts.

Posts / Replies

[Ganeshan Kalyani]

The inventory would be credited and cost of goods sold account would be debited. The value would be of inventory. On the supply part, the revenue account would be credited and customer account would be debited. The value would be the sale price.