TaxTMI 
TaxTMI 
Goods lost in transit as informed by the Courier service who had collected the goods therefore GST not paid on it. Whether it is correct? If not, what was the correct action to be taken? Any GST liability to the supplier?
Goods lost in transit
03 Aug 2023 
6 Replies 
6913 Views Asked by
Reversal of Input Tax Credit required where goods lost in transit, with output tax reporting and credit note issuance.
Where a tax invoice was issued but goods were lost in transit, the supplier should have reported the supply and discharged output tax; authorities may nonetheless seek tax with interest. The supplier should issue a credit note for non supply to reduce output liability and reverse input tax credit attributable to the lost goods because ITC is blocked when goods are lost, stolen, damaged, or written off. The buyer cannot claim ITC for goods not received. (AI Summary)
Where a tax invoice was issued but goods were lost in transit, the supplier should have reported the supply and discharged output tax; authorities may nonetheless seek tax with interest. The supplier should issue a credit note for non supply to reduce output liability and reverse input tax credit attributable to the lost goods because ITC is blocked when goods are lost, stolen, damaged, or written off. The buyer cannot claim ITC for goods not received. (AI Summary)