SEC 17(5)(h)

[KANHAIYA AGRAWAL]

The fire took place in my client factory. there is loss of some raw material .

We filed the claim with the insurance company. The Insurance company admitted the amount of loss excluding the GST and we retain the goods at salvage value.

As we did not recover the GST amount from the insurance company hence we did not reverse the ITC claimed (as required under section 17(5)(h) of CGST Act.)

Is there any disobeyment of Section 17(5)(h) of CGST Act???

AI Summary

Input tax credit reversal for goods destroyed by fire is required under Section 17(5)(h); insurers may need to be pursued for GST.
Whether input tax credit on raw materials lost or damaged in a factory fire must be reversed under Section 17(5)(h) is contested: contributors generally advise reversal (with interest) where goods are destroyed, regardless of insurer reimbursement; by contrast, damaged inputs retained and sold as scrap may preserve ITC and satisfy Section 16(1) conditions. Practical points include that insurers often exclude GST unless pushed, AARs are fact-specific, and taxpayers should consider reversing ITC and pursuing supplementary insurance claims based on contract terms.