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

Input tax credit reversal: damaged goods returned after taxable supply under GST does not require ITC reversal.
Where goods transferred as stock and claimed as ITC are damaged on receipt and returned to the supplying plant by a taxable supply with a tax invoice and IGST paid, the restriction that disallows credit for goods that are destroyed or written off does not apply; there is no revenue loss and the original ITC remains available. However, issuance of a tax credit note by the supplier may necessitate adjustment of ITC, while a non tax financial credit note does not.