GST compliance towards Goods lost in transit

[TEAM GST]

RTP 'A' raised an E-invoice on RTP 'B' for sale of 10kgs of goods . The entire stock of goods was burnt in transit due to an accident.Further 'A' raised a Credit note on 'B' and a Debit note on the insurance ompany towards Goods lost in transit.

Would this be the right approach for GST compliance.

[KALLESHAMURTHY MURTHY K.N.]

"A'' has taken the right actions by raising a credit note, which nullifies the tax liability on 'B' and issuing the debit note for recovery of loss from the insurance company; no GST applies to the insurance settlement. However, 'A' is required to reverse the Input Tax Credit availed on the destroyed goods.

[TEAM GST]

Thank you Sir

AI Summary

GST treatment of goods destroyed in transit requires recipient credit adjustment, insurance recovery without GST, and input tax credit reversal.
Where goods invoiced for sale are destroyed in transit, the supplier may issue a credit note to the recipient to nullify the tax liability relating to those goods and raise a debit note on the insurer for recovery of the loss. No GST applies to the insurance settlement. Input tax credit availed in respect of the destroyed goods is required to be reversed.