GST on Write off of inventory rm wip and fg

[Madhavan iyengar]

A company has some RM inventory/ WIP/ FG in stock of pre gst period which is not usable

Now it is proposed to write off the the RM/ Inventory/WIP/FG in books and also from inventory

Will ITC required to be reversed on the RM/Inventory/WIP/ FG as per sce 17(5)(h)

What will be basis for reversal and how to arrive at reversal amount

[DR.MARIAPPAN GOVINDARAJAN]

Since it is proposed to write off the credit shall be reversed. The value of the written off materials/inventory/WIP/finished goods may be taken and proportionate credit may be reversed.

[Ganeshan Kalyani]

Yes, the input tax credit proportionate to goods written off need to be reversed. As said by Sri Mariappan Sir the amount of reversal in your books of account to write off the goods can be taken as basis for reversal of credit.

AI Summary

Input tax credit reversal required when inventory is written off; reversal calculated proportionately using the goods' book value.
Input tax credit reversal is required when raw materials, work in progress or finished goods are written off as unusable. The reversal is to be calculated proportionately using the value of the written off items as recorded in the books of account, and the corresponding proportion of previously claimed input tax credit must be reversed.