Loss due to fire or theft GST Trearment, Goods and Services Tax - GST

[Ashwin Bhalakiya]

Dear Sir

In last few months in my freinds company operation, they had one fire and one theft. All Insurance formalities is over. Loss is assessed for both claims and both the parties agree with loss assessment except GST. For GST purpose Insurance are asking either reversal document of Input Tax credit with proof or Loss due to theft/Fire Tax Invoice as a proof that the company has either revered ITC or paid GST on Assessed amount. Based on that they will give GST claim to the company.

I advised to prepare B to C Tax Invoice as Loss due to theft/Fire, put all quantity which are lost with purchase price and at bottom reduce amount as discount for short receipt claim and on balance amount, which is received as Claim charge GST. This will resolve his accounting /inventory effect and also fulfill GST compliance. Please inform whether this suggetion given to him is correct considering section 17(5). Please advise what to be done by friend company if differ with my view.

Regards

Ashwin