Loss due to fire or theft GST Trearment

[Ashwin Bhalakiya]

Dear Sir

In last few months in my friends company operation, they had one fire and one theft. All Insurance formalities is over. Loss is assessed for both claims and both the parties agree with loss assessment except GST. For GST purpose Insurance are asking either reversal document of Input Tax credit with proof or Loss due to theft/Fire Tax Invoice as a proof that the company has either revered ITC or paid GST on Assessed amount. Based on that they will give GST claim to the company.

I advised to prepare B to C Tax Invoice as Loss due to theft/Fire, put all quantity which are lost with purchase price and at bottom reduce amount as discount for short receipt claim and on balance amount, which is received as Claim charge GST. This will resolve his accounting /inventory effect and also fulfill GST compliance. Please inform whether this suggetion given to him is correct considering section 17(5). Please advise what to be done by friend company if differ with my view.

Regards

Ashwin

AI Summary

Company Faces Insurance Hurdle: Complete GST Compliance by Reversing ITC via GSTR-3B or GST DRC-03 for Claim Approval. A company experienced losses due to fire and theft, and insurance formalities were completed except for GST compliance. The insurance requires proof of either reversal of Input Tax Credit (ITC) or a tax invoice for the losses. A suggestion was made to issue a B to C tax invoice to address this, but experts advised against it. Instead, they recommended reversing ITC through GSTR-3B or Form GST DRC-03 and properly documenting the loss in the stock register and financial accounts. Proper disclosure is necessary to avoid future complications.