TaxTMI 
TaxTMI 
2025 (4) TMI 228
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.... unascertainable at the time of removal. It can only be ascertained after the goods are actually decanted from the tanker into the special storage tank (installed at the buyer's premises) & quantity accepted by the buyer. During transit, certain quantity of the liquid gas is converted to gaseous form and evaporates thereby leading to transit loss. 4. During the legacy regime, in terms of circular No. 569/6/2001-CX dated 9.2.2001, excise duty was to be determined & paid in terms of Rule 8 of the Central Excise Rules, 1994 on the total quantity of liquid gasses actually delivered to the customer including the transit loss, if any. The applicant therefore, during this period, was discharging excise duty even on the gases lost in transit. 5. Presently, under the GST regime, they follow the procedure for removal of liquid gases as envisaged in Rule 55 of the CGST Rules, 2017; that the liquid gas is removed under the cover of delivery challan; that since the quantity to be received by the customer is not known at the time of removal, the tax invoice is raised after actual delivery of the gas to the customer. Further, the applicant is discharging GST on the gases lost during transit....
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....n inputs which have been issued in the manufacture of finished goods that are thereafter lost, stolen or destroyed; • that in the absence of a provision, the reversal of ITC on inputs already used for manufacture of finished goods that are lost or stolen or destroyed, once it is legitimately availed, it cannot be demanded back; • that they would like to rely on the below mentioned judgements viz • M/s. ARS Steel & Alloys International P Ltd 2021 (6) TMI 957 (Mad). • Eastman Exports Global Clothing P Ltd 2023 112 GSTR 106 (Mad). • M/s. R Ganpathy Chettiar 2022 (56) GSTL 129 (Mad). • M/s. Sardhambika Paper & Board Mills P Ltd 2021 (7) TMI 341 (Mad). • that the transit loss is not a loss akin to the one contemplated u/s 17 (5) (h), ibid; • that the gases which were lost in the transit were finished goods which were never supplied to the customer and accordingly, provisions of section 17 (5) (h), ibid are not applicable. 8. In view of the foregoing, the applicant raised the following questions seeking a ruling, viz (i) Whether GST is payable on goods lost in transit; ....
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....therance of business; [(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Explanation .- For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another; ] (b) import of services for a consideration whether or not in the course or furtherance of business; [and] (c) the activities specified in Schedule I, made or agreed to be made without a consideration; • Section 17. Apportionment of credit and blocked credits .- 5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely :- (h) goods lost, stolen, destroyed, written off or....
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....s, further stating that the liquification of gases only involves atmospheric air and cooling equipment; that the manufacturing process is fundamental to industrial gas production & is used worldwide to produce these essential gases for medical, industrial and scientific applications. 14. As far as supply of liquid gases and transit loss is concerned, the applicant, in his additional submission, has further stated as follows: • before the supply, the empty vehicle [VICTT [Vaccum Insulated Cyogenic Transport Tanks]], is weighed at the factory premises; • once the liquid gas is loaded, the weighment is done to determine the quantity of liquid gases filled in the VICTT; • the dispatch team generates single or multiple delivery challans in terms of Rule 55 of the CGST Rules, 2017; • the dispatch team initiates a trip sheet document simultaneously in SAP to record movement of the vehicle, distance travelled, etc.; • the finished goods is provisionally reduced in the SAP system; that an E-way bill is generated for the transaction; • the goods are unloaded in the tank at the customers premises; • ....
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....mported into or exported from India, where the supply involves movement of goods, shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient, irrespective of whether the movement of the goods is by the supplier or the recipient or by any other person. Thus, the transit loss, as is evident, is before the place of supply of goods. 18. As far as the time of supply of the goods is concerned, in terms of section 12 of the CGST Act, 2017, it shall be earlier of the following dates namely, (a) the date of issue of invoice by the supplier or the last date on which he is required, under section 31, to issue the invoice with respect to the supply; or (b) the date on which the supplier receives the payment with respect to the supply: The applicant is on record, that the invoice is generated post the supply of goods, before which, the transit loss has occurred. 19. As far as the scope of supply is concerned, section 7, [reproduced supra], clearly states that that supply includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made ....