Is gst payable on expired pre-gst goods on which no itc was claimed/available?

ITC / Input 256 views 4 replies

SKumar

Manager

385 Points Posted on 05 December 2018

My client is a distributor of packaged food products, which carry a pre-printed Best before date.

Client has stock of goods acquired against C-Form from manufacturer on which no ITC was available.

Said goods were already expired before GST transistion but Client chose to not write-off as they were hoping manufacturer would consider return and replacement. This food product is taxable @ 18% under GST.

In 2017-18 the Proprietor of Manufacturing firm passed away and there is no scope to exchange goods.

Now my Qns are as follows:

If Client writes off these goods, do they need to pay GST on the same?
If yes/no, please quote the specific act & section which clarifies taxability/exemption.

Replies (4)

pritesh

CA Final student

7106 Points Posted on 05 December 2018

No you are not required to pay gst..

As per section 17(5) ITC need to be reversed in case of good stole, written off. or disposed off..on which you have claim ITC before..

in your case you have not purchase this goods in gst period..it has been purchase before.so no need reverse..

as per my opinion..pls confirm with others one tym

SKumar

Manager

385 Points Posted on 06 December 2018

Thank you Pritesh for the crisp explanation.

I eagerly await alternate/additional opinions from our contributors/experts.

Ravi SADhiyan

Practice

4510 Points Posted on 06 December 2018

As Per Section 7 (1) (c) and Schedule I

In Your Case No GST Liability arise because Stock is a your business assets in which you have not claimed any ITC

SKumar

Manager

385 Points Posted on 14 December 2018

@ Ravi @ Pritesh

Am concerned if Section 7 (1) d CGST Act read with Point 4 of Schedule II will apply?

Point 4 Transfer of Business assets

a) where goods

forming part of assets of business
are transferred or disposed off
by or under the directions of the person carrying on the business
so as no longer to form part of those assets, whether or not for a consideration,

such transfer or disposal is a supply of goods by the person;