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Input tax credit in case of goods destroyed by fire

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Querist : Anonymous

Querist : Anonymous (Querist)

08 January 2014 1) whether input tax credit under MVAT act 2002 available in case of Goods destroyed by Fire which is head as stock in trade, it include Raw Material, semi-finished and finished goods. also provide related case law (if any)

2)if insurance claim received against loss of stock and claim does not recover any tax amount than what the treatment of VAT ???
whether reversal of input tax credit or payable of VAT on Claim amount received???

Ganeshbabu K

Ganeshbabu K (Expert)
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09 January 2014 The vat paid on purchases of goods that were destroyed by fire,rioting,floods,theft etc and brought on record have to be reversed in the returns.This is because of no taxable sales or consumption for production of taxable goods out of such destroyed goods can be made.

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