Changes of HSN attracts Section 17 of GST

[Raman Singla]

We purchase Battery (HSN - 8507 GST Rate 28%) without any claim from seller. In the course of reselling under our brand, few of them say 35% of total product is not as per standard or not working as per requirement.

The standardised product sold at high margin with guarantee/warranty in the market.

And to recover the maximum value from unstandardized /not working product we dismantle the product through job work results into Lead and Plastic Shell, where lead consist 65% and remaining plastic shell consist 5% of the total product . Both Lead (HSN 7801 GST rate 18%) and waste plastic shell (HSN 3915 GST rate 18%) sold in open market, which derives almost to recover 70% value of the product. OR some time due to busy schedule or to recover fast cash the unstandardized/not working product sold as it is to recover 65% of value in the open market by naming Waste battery (HSN 8548 GST rate 18%).

Now my query is : Is there any part which attracts section 17 of GST ?

Will TCS on sale of Waste Plastic applicable ?

[Ganeshan Kalyani]

In my view no item mentioned in your query falls under sec 17(5).

[Shilpi Jain]

I think your query is not very clear. Are you asking regarding reversal of credit (s. 17(2)) or ineligible credit (s. 17(5))?

[Shilpi Jain]

Also if you are asking about TCS under GST, TCS is applicable under GST only when sale is made through e-commerce operator and where such e-com operator collects the consideration.

[Raman Singla]

Reversal of credit

AND

TCS is Under I TAX

[Shilpi Jain]

As far as your outward supply is taxable, eventhough at a lesser value or rate, reversal of credit not required.

AI Summary

Input tax credit reversal: taxable outward supplies, even at reduced value, generally do not require credit reversal. Contributors concluded that dismantling or resale of defective batteries into lead, waste plastic, or waste batteries under different HSNs does not fall within the categories of ineligible credit and that reversal of input tax credit is not required where the outward supply is taxable, even at a reduced value or rate. GST TCS applies only when consideration is collected through an e commerce operator; TCS under income tax is distinct.