Gst on samples drawn for testing

This query is : Resolved

Kaustubh Ram Karandikar (Querist)
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18 March 2019 XYZ(Manufacturer) withdrawing samples of raw material, semi – finished goods and finished goods for Q.C. testing within factory. The samples get consumed / destroyed during testing. Is XYZ required to reverse proportionate input tax credit / pay GST on such samples?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 March 2019 QC testing is a part of manufacturing process ITC reversal not required.
Reversal required only when damaged in transit or through fire or natural calamities.

CMA Bhavya

CMA Bhavya (Expert)
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18 March 2019 Hi sir,
In my view , you need to reverse those sample draw-which is consumed on site. because as per Sec. 17(5) (b)(iii)(h) of CGST Act 2017
goods lost, stolen destroyed , written off or disposed by way of gift or free samples
because after testing you are destroying those samples.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 March 2019 Testing will not fall under goods lost, stolen destroyed , written off or disposed by way of gift or free samples. Reverse not required.

Message likes : 3 times

CMA Bhavya

CMA Bhavya (Expert)
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18 March 2019 Dear seetharaman Sir, Thank you for correction.