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

HSN classification: describe and invoice machinery or scrap accordingly, stating the applicable HSN and tax rate. Disposal of ginning machinery after claiming input tax credit depends on its factual condition: if sold as a functioning unit it must be described as machinery with the corresponding HSN; if sold as scrap it must be described as scrap with the HSN for scrap and the applicable tax rate. Section 18(6) of the CGST Act and Rule 40(2) of the CGST Rules require HSN disclosure on tax invoices, so the seller must determine the correct classification and state the appropriate HSN and tax rate on the invoice.