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

Input tax credit reversal for damaged goods not used in business; sale as scrap may still require reversal.
Whether input tax credit on damaged raw materials must be reversed depends on whether the inputs are treated as lost/destroyed and unavailable for business use under Section 17(5)(h), in which case credit on the damaged portion must be disallowed or reversed, or whether the damaged goods were sold as saleable goods (including as scrap) with GST charged, in which case credit may remain available.