Loss of capital goods

[Kaustubh Karandikar]

Capital Goods on which either VAT or ITC was claimed, were not traceable during physical verification. Therefore, where credit of VAT was claimed, SGST was paid on depreciated value and where ITC was claimed, GST was paid on depreciated value. Sir, in my view since goods were not supplied at depreciated value but were lost / not traceable, the full ITC needs to be reversed and where VAT credit was claimed in the VAT regime, there was no need to pay GST/ reversal of ITC. Is my understanding correct?

AI Summary

Debate on GST: Should ITC be reversed for lost capital goods if used for business and taxable supplies? A participant raised a query regarding the treatment of capital goods under GST, specifically when goods on which VAT or ITC was claimed are lost or untraceable. The participant suggested that full ITC reversal might be necessary, but not for VAT credits. Another participant responded, agreeing that VAT credits need no reversal since no ITC was claimed. For ITC, if the goods were used for business and taxable supplies, the credit could be a vested right, suggesting no reversal is needed unless expressly provided by GST provisions, though this stance might be considered aggressive.