A sweetshop owner selling goods under hsn 2106 has to throw away some sweets after few days according to guidelines of food authority. Now the sweetshop owner need to pay gst on such sweets or reverse itc or no treatment? Bcz Section 17(5)(h) of cgst act hai usme likha hai goods lost , stolen,destroyed, written off or disposed off.. Itc shall not be available on these.. So whats the correct?
Hi
If you go strictly by the law, ITC in respect of goods destroyed is an ineligible credit and hence cannot be claimed. If claimed, it has to be reversed.
However, keeping in view your business, no one would actually disclose the information regarding such destroyed goods. So, practically, such situation won't arise.
Dear Sir,
Here is my reply to your query:
In case of wastage of some food products, No Treatment is required as per the provisions of GST act.
1. You are not required to pay any tax on waste products.
2. You are not required to reverse the input credit in regard to the waste products.
Thanks and Regards
Divya Chugh
- If you maintains the record of stock then GST should be reversed.
Hi,
GST can be reversed subject to proper documentation.
Hello,
Technically, yes you would be required to reverse the ITC proportionate to the quantity of finished goods disposed off, if proper records are being maintained for the same. Finished products disposed off are liable to reversal of ITC.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
It can be saved from above section if we say its a normal loss and in that case no need to reverse ITC on same or no need to pay GST on such output.
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Thank you.
