17 (5) GOODS DAMAGE & SCRAP SALE, Goods and Services Tax - GST

[santosh yadav]

Dear Professional,

We had bought the goods 2 years back due to non-sales on time got spoiled which we sold in scrap should we refund the input tax of the value which is difference of scrap sale and purchase price

Posts / Replies

[KASTURI SETHI]

In my view, reversal is not required on the following grounds :-

(i) Not hit by Section 17(5)(h) of CGST Act. The word. 'spoiled' does not find place in this sub-clause.

"(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and

(ii) Sale of scrap i.e. spoiled goods are covered in the phrase, "used in the course or furtherance of his business" as per Section 16 (1) of CGST Act

[Shilpi Jain]

Agree with kasturi sir. Once goods sold with payment of tax, be it whatever value , ITC would be eligible.

[Ganeshan Kalyani]

No need to reverse the input tax credit as clarified by experts.

[RAMASWAMY Advocate]

yes, in my view the expert opinions appear to be correct.

[KASTURI SETHI]

Sh.Ramaswamy Ji,

Thanks for your concurrence with the views. I could not digest the word, 'appears'. In my views, the word, 'appears' contains the element of uncertainty. In other words, the absence of confirmation. Do you agree ? Your views please, sir.