TaxTMI 
TaxTMI 
TaxTMI 
ITC reversal
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....TC reversal<br> Query (Issue) Started By: - shwetal oswal Dated:- 28-6-2022 Last Reply Date:- 9-7-2022 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>The recipient has debited the supplier by Rs. 30000/- due to damaged goods received. The recipient has neither reversed the ITC nor the supplier has reduced his liability. Can department still insist for reversal of ITC? Reply By Shilpi J....
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....ain: The Reply: ITC blocking u/s 17(5) is attracted in case of goods destroyed... If your case is damaged goods and there is a salvage value, blocking may not be applicable Reply By Amit Agrawal: The Reply: From the query, it is presumably understood that concerned goods were damaged but capable of being repaired economically and re-used. And if so, attention is invited to Section 34 (1) of th....
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....e CGST Act, 2017 which reads as under: "[Where one or more tax invoices have] been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be defi....
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....cient, the registered person, who has supplied such goods or services or both, may issue to the recipient 2[one or more credit notes for supplies made in a financial year] containing such particulars as may be prescribed" In my view, issuance of credit-note under above-said 34 (1) is not mandatory on the supplier. And If supplier had not issued any such credit-note u/s 34 (and difference of ....
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....Rs. 30,000/- was settled with accounting / commercial credit-note from supplier & corresponding accounting / commercial debit-note from recipient ...... please note that both these documents are different from similarly-worded documents prescribed in Section 34), then, Dept. can NOT insist for reversal of any ITC at the end of the buyer in my humble view. These are strictly personal views of mine....
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.... and the same should not be construed as professional advice / suggestion. Reply By KASTURI SETHI: The Reply: Best fitted in the definition of the term, 'salvage' as opined by Madam Shilpi Jain. Hence no reversal required. There is no risk for SCN. In case SCN is issued, that will not sustain. Reply By YAGAY andSUN: The Reply: If the supplier claims Insurance along with GST paid agains....
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....t damaged goods, then ITC needs to be reversed by the recipient of damaged goods as he will not pay any amount to the supplier. Reply By Shilpi Jain: The Reply: A view can be taken that the goods are used for business and in the course of business they were damaged and thereby no credit reversal. However this view could be disputed.<br> Discussion Forum - Knowledge Sharing ....