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Damaged stock

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Nagesh V

Articla Assistant

33 Points Posted on 20 October 2021

gst effect on damaged stock

Replies (3)

Quick Summary

This discussion clarifies the GST treatment of damaged stock, specifically regarding Input Tax Credit (ITC). According to Section 17(5)(h) of the CGST Act, ITC cannot be claimed on damaged goods. If ITC was already claimed, it must be reversed. The example provided highlights a situation where heavy rain caused stock damage, leading to an insurance claim. The user opted to receive the insurance payout without GST due to ITC reversal complications, seeking clarity on the overall GST effect.

Kev Men

790 Points Posted on 20 October 2021

As per section 17(5)(h) of the CGST Act, ITC cannot be claimed on the same.

If ITC is already claimed then ITC will need to be reversed i.e will need to be paid.

Nagesh V

Articla Assistant

33 Points Posted on 20 October 2021

Sir due to heavy rain we have lost approx 350000 which was insured example cost is 10rs including gst itc claimed , we have not received from the insurance company with out gst they asked with gst or without gst because of the reversal of itc issues we opted to with out gst . we have not received gst what will be the effect .