ITC implication

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28 Points Posted on 11 January 2022

Dear All,

 

We need clarification for below scenario.

i.e. Material Purchased of 100+ 18 tax ( ITC availed for full value of Rs.18)

Same material  has been sold to our dealer to 25+ 4.5 Tax .

in this above case ,if there any implication to avail 100% ITC? or we need to reverse, please clarify. 

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On 11 January 2022 at 12:18 Report
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Quick Summary
This discussion clarifies a scenario regarding Input Tax Credit (ITC) when materials are purchased and then sold at a loss. The question is whether 100% ITC can be availed when the purchase price (including tax) is higher than the selling price (including tax). The consensus is that 100% ITC can be availed as there is no loss of goods, only a sale at a lower price.

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Chartered Accountant
5010 Points Posted on 11 January 2022

Yes in my opinion you can avail of the 100% ITC because you have sold the goods at loss. 

There is no such loss of goods because of which you have to reverse the ITC. 

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On 11 January 2022 at 12:58
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CA
10436 Points Posted on 11 January 2022
Yes you can avail 100% ITC
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On 11 January 2022 at 19:48

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