GST ON INSURANCE CLAIM AGAINST GOODS

[ajay chharia]

1.BUYER HAS PURCHASED THE GOODS ON EX-FACTORY TERMS AND TAKEN INSURANCE COVER FOR TRANSIT.

A. THE GOODS (PAPER) GOT WET DUE TO RAIN , THE PRICE OF PAPER REDUCE SAY FROM ₹ 50/- PER KG TO ₹ 30/- PER KG.BUYER GET THE CLAIM.HOW TO TREAT THIS CLAIM UNDER GST,WHETHER TAXABLE? THE BUYER HAS SOLD THE GOODS AT LOWER PRICE .

2.THE ENTIRE LOT GOT COMPLETELY DAMAGED AND NO RECOVERY BY BUYER,ALSO GOT INSURANCE CLAIM.HOW TO TREAT THIS CLAIM UNDER GST,WHETHER TAXABLE? IN THIS CASE BUYER HAS NOT TAKEN ITC AS PER SEC 17(5)(h)

AI Summary

Insurance Claims and GST: Reduced Sale Price Affects GST, No ITC for Damaged Goods Per Section 17(5)(h) A discussion on a forum addresses the treatment of insurance claims under GST for goods damaged during transit. A buyer purchased goods under ex-factory terms and insured them for transit. In one scenario, the goods' value decreased due to rain, and the buyer received an insurance claim. Replies indicate GST applies to the reduced sale price, but input tax credit (ITC) cannot be claimed on the loss. In another scenario, the entire lot was damaged, and the buyer received an insurance claim without GST. Here, no GST impact is noted, and ITC is not applicable as per Section 17(5)(h).