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

E waste taxation: classify non-functional laptops as e waste for GST and apply higher-side ITC reversal rules. Sales of non-functional laptops that can only be disposed of as scrap should be classified and taxed as e waste under the Chapter 85 notification (serial no. 371 A); where the transaction is disposal of a used asset, input tax credit reversal must be determined by applying the ITC reversal provision together with the relevant rule to give effect to the 'whichever is higher' criterion, and any higher tax impact must be accounted for.