Whether ITC is to be reversed on Inputs if Finished Goods billed but not delivered to recipient is Destroyed in Fire, Goods and Services Tax - GST

[Ramesh Kumar]

Dear experts,

My query is whether ITC is required to be reversed on inputs if finished goods which were billed to customer, but were destroyed in fire accident before delivery.

In this case, the party has already billed the finished goods and consideration is received including GST. Below are the different scenarios I am seeking a clarity.

1. Goods billed but not delivered. Consideration not received. Is ITC to be reversed on inputs.

2. Goods billed, consideration received, but goods not delivered. Is ITC to be reversed on inputs.

3. Has supply happened just by raising invoice and receiving consideration, without actual delivery of goods?

4. If details of inputs used for finished goods destroyed during fire are not available, can Department raise demand on the basis of value of the finished goods or insurance claim received on those goods @18%?

Please put some light on the above issues.

Posts / Replies

[Shilpi Jain]

Has the customer accepted the invoice or subsequently credit note was issued?

If CN issued then supply has not taken place.

[Shilpi Jain]

Pls give further facts to give view to your queries.

Whether the contract is ex-works or requires delivery at customer place?