DAMAGED GOODS SOLD,IS ITC REQUIRED TO REVERSE??

[PAWAN BANSAL]

Dear Professional ,

We have purchase some raw materials and after receiving we came to know that it got damaged and sold all the damaged goods to insurance surveyor at a lower price.with GST.

are we supposed to reverse ITC?

is the reply will be same if we sold as a scrap??

Thanks & Regards

P Bansal

AI Summary

Debate on ITC Reversal for Damaged Goods Sold as Scrap under GST: Section 17(5)(h) Interpretation A query was raised about whether Input Tax Credit (ITC) needs to be reversed when damaged goods are sold, either directly or as scrap, under the Goods and Services Tax (GST) framework. The consensus among respondents was mixed. Some argued that if goods are sold as scrap or damaged goods with GST paid, no ITC reversal is required. Others contended that since the goods were damaged and not used in business, ITC should be reversed as per Section 17(5)(h) of the CGST Act, 2017. The discussion highlighted the need to consider the legal definitions and conditions under which ITC can be claimed or reversed.