Sale of old ginning machinery as scrap

[Allauddin Patel]

My question is ...

We had purchased cotton ginning machinery and taken itc on it...

Can we sell this machinery as scrap ?

If yes then should we need to mention in tax invoice ginning machinery and its hsn or scrap and its hsn ?

Kindly clarify me

 

[KASTURI SETHI]

See Section 18(6) of CGST Act and Rule 40 (2) of CGST Rules. HSN has to be mentioned. 

[Allauddin Patel]

Im asking either i have to mention in tax invoice old gnning machinery as goods name and hsn of that or need to mention scrap and hsn of that ?

[Sadanand Bulbule]

 If the old ginning machinery is in working condition and want to sell it in the same condition as a single unit,you have to mention like that. Otherwise as scrap in kgs. However in both the situations, you need to mention the applicable HSN. You know your facts better than what is asked for here. Take a final call accordingly.

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

                   Sir,   I am indebted to you for  your cognitive   response/reply.

[Shilpi Jain]

Tax laws cannot restrict you from selling machinery as scrap.

If sold as scrap, mention the HSN of scrap and applicable rate of tax

AI Summary

Cotton ginning machinery sale as scrap requires proper HSN classification based on condition and sale method under Section 18(6) CGST Act A business owner who purchased cotton ginning machinery and claimed input tax credit inquired about selling the machinery as scrap and the proper HSN classification for tax invoices. Legal experts clarified that under Section 18(6) of CGST Act and Rule 40(2) of CGST Rules, HSN must be mentioned on tax invoices. The classification depends on the machinery's condition and sale method. If selling functional machinery as a complete unit, it should be classified as machinery with corresponding HSN. If selling as scrap by weight, it should be classified as scrap with applicable HSN code. Tax laws do not restrict selling machinery as scrap, but proper HSN classification and applicable tax rates must be applied based on the actual nature of goods being sold.