Gst on samples drawn for testing


(Querist)
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 (Expert)


Click to Talk 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 (Expert)
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 (Expert)


Click to Talk 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.


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

SHUBHAM SHARMA (Expert)
22 March 2019
In my humble opinion also goods have been consumed not lost.


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