Waste and Scrap

[Kaustubh Karandikar]

XYZ is in the manufacture of Sweets and Namkeen. The waste generated while manufacturing these products are non – marketable and therefore is disposed of by dumping and destroying outside the factory without payment of GST. Are they required to proportionately reverse the ITC on common goods and services since no GST is paid on such waste?

AI Summary

Does GST Apply to Manufacturing Waste? Debate on ITC Reversal When Disposing Sweet and Snack Waste A discussion on the applicability of Goods and Services Tax (GST) to waste generated during the manufacture of sweets and snacks. The initial query asks if Input Tax Credit (ITC) should be reversed when such waste is disposed of without GST payment. One respondent argues that the disposal of waste is considered an 'outward supply' under the CGST Act, necessitating ITC reversal. Others disagree, stating that waste disposal does not constitute a supply and thus does not require ITC reversal. Another participant notes that Tax Collection at Source (TCS) under the Income Tax Act may apply to manufacturing scrap.