IGST Paid on Import , Shortage material receipt

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This query is : Resolved

Quick Summary

This discussion addresses whether GST credit needs to be reversed when imported goods are received short of the quantity declared. The consensus is that since the goods were not fully received, proportionate Input Tax Credit (ITC) must be reversed according to Section 16(2) of the GST law. While the IGST was paid on the full import value, ITC can only be claimed for goods actually received, and a refund process for the excess IGST paid on the shortage is the recommended course of action.

bhavik mehta

bhavik mehta (Querist)

13 February 2021 Dear Sir,

I have a case of IGST paid on Import of 100 Tonne. However, it was short receipt 95 Tonne. Do I require to reverse GST credit on shortage of material received ?

If you can explain with provision reference and also with pre GST Excise provision comparative reference, it would be great.
Thanks in advance.

CA Altamush Zafar

CA Altamush Zafar (Expert)

13 February 2021 As per section 16(2) one of the conditions to avail ITC is that you should have received the goods or service. Since goods were not received proportionate ITC needs to be reversed.

bhavik mehta

bhavik mehta (Querist)

13 February 2021 @ CA Altamush Zafar, I believe then I need to take refund of IGST Paid for shortage of material. Why I should pay Tax on good which is not received ?!

And it's a normal loss in transit. Any change in view ???

CA Altamush Zafar

CA Altamush Zafar (Expert)

13 February 2021 No change in view.
You have paid GST on imports as per customs valuations.
You have to take itc as per GST law.
Refund is allowed of itc which are eligible.

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