TaxTMI 
TaxTMI 
Dear Professional,
We had bought the goods 2 years back due to non-sales on time got spoiled which we sold in scrap should we refund the input tax of the value which is difference of scrap sale and purchase price
17 (5) GOODS DAMAGE & SCRAP SALE
14 Oct 2021 
5 Replies 
4445 Views Asked by
Input tax credit reversal not required when spoiled goods are sold as scrap and tax has been paid.
Reversal of input tax credit is not required when goods that became spoiled are sold as scrap. The statutory exceptions to credit retention do not expressly cover spoilage, and disposal by sale of scrap with tax charged is treated as use in the course or furtherance of business, thereby preserving input tax credit eligibility. (AI Summary)
Reversal of input tax credit is not required when goods that became spoiled are sold as scrap. The statutory exceptions to credit retention do not expressly cover spoilage, and disposal by sale of scrap with tax charged is treated as use in the course or furtherance of business, thereby preserving input tax credit eligibility. (AI Summary)