TaxTMI 
TaxTMI 
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
Sale of old ginning machinery as scrap
12 Jul 2025 
5 Replies 
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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. (AI Summary)
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. (AI Summary)