GST on samples drawn for testing

[Kaustubh Karandikar]

XYZ(Manufacturer) withdrawing samples of raw material, semi – finished goods and finished goods for Q.C. testing within factory. The samples get consumed / destroyed during testing. Is XYZ required to reverse proportionate input tax credit / pay GST on such samples?

AI Summary

Experts Debate GST Input Tax Credit on Samples Used or Destroyed in Testing, Referencing Section 17(5) and Case Laws A discussion on a forum addressed whether a manufacturer, XYZ, must reverse input tax credit or pay GST on samples consumed or destroyed during quality control testing. One expert, Mahadev R, stated that input tax credit should not be restricted for goods consumed in testing, referencing Section 17(5) and relevant case laws. Kasturi Sethi agreed, citing a Supreme Court judgment that dismissed an appeal regarding excise duty on destroyed samples. Dr. Mariappan Govindarajan suggested referring the issue to the GST Council for a comprehensive decision. The discussion highlights differing interpretations of GST provisions on testing samples.