Reversal of Input on damaged goods

[Shrikanth Parmarthy]

dear experts,

There are transfer of goods from plants located in Andhra Pradesh to Sales office located in Karnataka through Stock transfer by paying IGST. ITC on those goods was claimed. Some goods were found damaged on receipt at Karnataka sales office. The same goods were transferred back to plant located in AP by paying IGST so that same can be scrapped or reused. Karnataka GST officer is asking to reverse the ITC as per provisions of the act. Our contention is' as we have already paid outward tax there is no loss to GST department'. Is our view correct. Kindly provide your views in this regard.

AI Summary

Goods Transfer and Tax Credit Dispute: Company Successfully Challenges Input Tax Credit Reversal Under GST Regulations A company transferred goods from Andhra Pradesh to Karnataka, claiming input tax credit. Some goods were damaged and returned to the original plant for scrapping or reuse by paying IGST. The Karnataka GST officer demanded ITC reversal under Section 17(5)(h), but forum experts argued that this provision does not apply since the goods were not destroyed and a taxable supply invoice was raised for the return. The company successfully convinced the officer using the provided legal reasoning.