XYZ is a manufacturer and is registered with GST. Fire broke out ay his manufacturing unit and the
1) Raw Material,
2) Semi – finished Goods and
3) Finished goods got damaged in the fire. These goods now they want to destroy being unusable. What is the action to be taken against each item as per GST provisions?
Manufacturer Must Reverse ITC for Fire-Damaged Goods Under Section 17(5) of CGST Act 2017; Notify GST Department A manufacturer registered under GST experienced a fire that damaged raw materials, semi-finished, and finished goods, rendering them unusable. According to Section 17(5) of the CGST Act 2017, input tax credit (ITC) on such goods must be reversed as they are considered destroyed. Insurance claims for these goods are not treated as supply of goods or services. It's advised to notify the GST department and obtain permission from the jurisdictional Deputy Commissioner to destroy the unusable goods. The section has an overriding effect, clearly stating that ITC is unavailable for goods lost or destroyed. (AI Summary)
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