Applicability of vat on insurance claim

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whether Vat is payable on Insurance Claim received for stock damaged and burnt in fire

AI Summary

Is VAT Applicable on Insurance Claims for Fire-Damaged Stock? Discussion Highlights Input Tax Credit Reversal Requirements A discussion forum addressed whether VAT is applicable on insurance claims for stock damaged by fire. One participant argued that VAT is only payable on the sale of goods, not on insurance settlements, and advised reversing any input tax credit claimed on the damaged stock. Another participant contended that input tax credit might not always need to be reversed, as the loss is a business loss occurring after purchase. However, it was noted that many State VAT Acts require reversing input tax credit for goods not sold due to loss or destruction.