ITC reversal

[shwetal oswal]

The recipient has debited the supplier by Rs. 30000/- due to damaged goods received.

The recipient has neither reversed the ITC nor the supplier has reduced his liability.

Can department still insist for reversal of ITC?

AI Summary

Debate on ITC reversal for damaged goods under CGST Act: Sections 17(5) and 34(1) discussed. Divergent views emerge. A discussion on a forum addresses whether Input Tax Credit (ITC) should be reversed when a recipient debits a supplier due to receiving damaged goods. The recipient did not reverse the ITC, nor did the supplier reduce their liability. Contributors discuss the applicability of ITC blocking under Section 17(5) and the issuance of credit notes under Section 34(1) of the CGST Act, 2017. Opinions vary, with some suggesting no reversal is needed if goods have salvage value or are repairable, while others note that if insurance is claimed, ITC reversal may be necessary.