TaxTMI 
TaxTMI 
Dear Sir, My stocks are destroyed in a fire accident. Some stocks are fully damaged and some stocks are partially Damaged. Received Insurance Claim also. Partially damaged Stock is sold at ₹ 10 per KG which is purchased for ₹ 100 per Kg. stocks. 1. Am I required to reverse ITC on partially damaged stocks also. 2. If I am not required to reverse the ITC , ITC per kg is ₹ 18 where as GST on Outward supply is ₹ 1.80 per Kg . Whether the department will accept this ? Please clarify.
ITC Reversal on Partially Damaged Stocks
18 Oct 2019 
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Input tax credit reversal required for destroyed goods, while sale of partially damaged stock may affect reversal obligations.
ITC is available only when inputs are used in the course or furtherance of business for taxable outward supplies; goods lost, stolen, destroyed or written off fall within the exclusion requiring reversal of credit under Section 17(5)(h). Practitioners disagree on partially damaged stock: some require reversal, while others argue that sale of such stock with GST charged constitutes an activity in the course of business so reversal is not necessary. (AI Summary)
ITC is available only when inputs are used in the course or furtherance of business for taxable outward supplies; goods lost, stolen, destroyed or written off fall within the exclusion requiring reversal of credit under Section 17(5)(h). Practitioners disagree on partially damaged stock: some require reversal, while others argue that sale of such stock with GST charged constitutes an activity in the course of business so reversal is not necessary. (AI Summary)