IGST PAID ON IMPORTS

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An import-based manufacturing company paid IGST on imports and claimed it as Input Tax Credit (ITC). However, the GST officer reversed part of the ITC due to short quantities received and demanded interest. The discussion clarifies that ITC reversal is generally required for lost stock under GST rules, including losses in transit, and penalties may apply if the department identifies such losses.

SRINIVAS

SRINIVAS (Querist)
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30 April 2021 Hi sir
Our organisation is Import based manufacturing concern , While filing Bill of entry to release goods we paid IGST , and the same is claimed as ITC while filing GSTR 3B when it is reflected from ICEGATE portal.

Now my question is, Our GST officer reverse the part of ITC related to imports to the extent of Short quantity received from july 2017 to march 2019, and ask us to pay interest@ 18% , for not reversing ITC .

In relation to imports it is general cause that some time short quantities and some times more quantities received , But based on which ITC reversal is genuine?

is there is any caselaws or section to protect our selves.

thanking you

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 May 2021 As per GST Rules of ITC, reversal of ITC is required for loss of stock.
Hence the reversal of ITC for short quantity received is genuine.

CA Altamush Zafar

CA Altamush Zafar (Expert)
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01 May 2021 ITC on inputs lost in transit will have to be reversed along with interest. If department identifies such loss then it will also impose penalty

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