Goods lost in fire also includes ‘Work – In – Process (WIP’) material. How to arrive at the amount of input tax credit to be reversed in case of WIP lost in fire?
ITC reversal on goods lost in fire
Kaustubh Karandikar
Debate on Reversing Input Tax Credit for Goods Lost in Fire; Focus on Work-in-Process Materials, Section Requirements Discussed. A discussion on a forum addressed the issue of reversing Input Tax Credit (ITC) for goods lost in a fire, specifically focusing on work-in-process (WIP) materials. One participant suggested reversing ITC based on inputs consumed in WIP, while another proposed using data from the Bill of Quantities to estimate and reverse ITC. A different view argued that ITC reversal might not be necessary for intermediary or finished goods lost, citing the absence of specific provisions. Another contributor emphasized that goods lost due to fire fall under a particular section requiring ITC reversal, suggesting using available stock data to calculate the reversal. (AI Summary)