HSN code and taxability

[VishnuPriya R]

An IT company wants to sell its used laptops. However the laptops are no longer in a usable condition and it can only sold as scrap i.e E waste. In this case, should we use HSN 8417 (i.e HSN code for laptops) or HSN 8548 (i.e HSN of E waste). Further, the sale of E waste amounts to sale of used assets and warrants ITC reversal as per section 18 (6)?.

Thanks in advance

[KASTURI SETHI]

Pay GST @ 18 % under Chapter 85 as E-waste. See serial no. 371 A of Notification No. 6/22-CT (R) dated 13.7.22 amending original notification No. 1/17-CT (R) dated 29.06.17. Read serial no. 371 A word for word.

Section 18(6) of CGST Act should be read with Rule 40 (2) of CGST Rules in order to fulfil the condition of, "whichever is higher".

Tax on higher side has to be taken care of.

[Sadanand Bulbule]

Dear all

I fully endorse the express clarification of Sh.Sethi Sir ji.

[Shilpi Jain]

Is the asset not used for more than 5 years?

AI Summary

IT company seeks HSN code guidance for selling unusable laptops as e-waste, queries ITC reversal under CGST Section 18(6). An IT company seeks guidance on the appropriate Harmonized System of Nomenclature (HSN) code for selling its unusable laptops as e-waste. The question is whether to use HSN 8417 for laptops or HSN 8548 for e-waste. Additionally, there's a query about whether this sale requires Input Tax Credit (ITC) reversal under section 18(6) of the CGST Act. One response advises applying an 18% GST rate under Chapter 85 for e-waste, referencing specific notifications and suggesting consideration of tax on the higher side. Another respondent agrees with this clarification, while a third inquires about the asset's usage duration.