CENVAT TAKEN TO BE REVERSED ON INSURANCE CLAIM

[SAFETAB LIFESCIENCE]

Dear Experts,

A company's Raw Materials got damaged/lost due to fire accident in August, during GST regime. The materials purchased prior to July and Cenvat availed got fired and totally lost.

Now, they are about to get insurance claim and insurance company insisting to reverse the input duty (Cenvat) availed for the materials which got fired and lost totally.

What amount they have to reverse ? Availed 12 % Excise Duty amount (or) 18% GST amount which being the present Tax structure for the said commodity lost. How, the duty can be reversed in GST. The only one way to reverse ITC if required balance is there in Electronic Credit Ledger (or) pay cash vide challan and put one entry in GSTR-3B. I think there is no clear explanation for such of this issues.

Insurance company will give the exact amount of Tax 12 % or 18% the amount debited and proof given. But, the affected company has to buy Raw Materials only at 18% GST.

Please guide......

AI Summary

Company Must Reverse 12% Excise Duty Credit for Destroyed Materials, Not 18% GST Rate A company experienced a fire that destroyed raw materials purchased before July, for which Cenvat credit was availed. They are set to receive an insurance claim, but the insurer requires them to reverse the input duty credit. The company is uncertain whether to reverse the 12% Excise Duty or the current 18% GST rate. The reversal can be done through the Electronic Credit Ledger or by cash via challan, recorded in GSTR-3B. An expert advised that the credit taken at the time of receipt of the materials should be reversed, regardless of the reversal date.