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Expire stock

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Rahul Bose

49 Points Posted on 26 November 2024

Currently, some stock(instant tea 18% in GST Rate) in our firm (Partnership Firm) has expired, which was purchased in January 2024. What entry should be made in the books of account and GST in this case?

If you could help, it would be greatly appreciated

Replies (2)

Quick Summary

When stock expires, it must be written off from your inventory and accounted for as a business loss. Crucially, you need to reverse any GST credit (ITC) previously claimed on the purchase of these expired goods. Ensure your GST returns, specifically GSTR-3B, reflect this reversal in the month the stock is written off. Maintaining a record or certificate of destruction is essential evidence for tax purposes.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 26 November 2024

Since the stock is now expired and cannot be sold, it will need to be written off from your inventory.

You need to reverse the GST credit you had claimed on the purchase of the stock, as the goods are no longer usable or saleable.

You should also update your GST returns (GSTR-1, GSTR-3B) for the relevant period by ensuring that the reversal of ITC is included.

Aashok Kumar Sharma

Finance/Compliance Consultant

77025 Points Posted on 07 November 2026

Accounting and GST for expired stock:

• Write off the expired stock: Dr Loss on expired goods (P&L), Cr Purchases / Stock. It's deductible as a business loss under Sec 28/37 (normal trading loss).

• GST: ITC on goods destroyed or written off must be reversed (Sec 17(5)(h)). Reverse the ITC originally taken on that stock (18%) in GSTR-3B Table 4(B)(1)/(2) in the month of write-off.

• If the supplier takes the goods back (return or replacement), the supplier issues a credit note and no write-off reversal is needed.

• Keep a destruction certificate or record (date, quantity, witness) as evidence for both tax laws.