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ITC on goods sold at lower rate than purchase rate

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Akshay Jain

Tax Consultant

1024 Points Posted on 21 August 2022

Dear Sir, A dealer has purchased goods. He rented this goods many times but now at the time of sale value of these goods are very lower. I.e. purchase @ 5000 and Selling @ 800 due to rented many times. now what to do. is ITC disallowed or allowed or what

Replies (5)

Quick Summary

A dealer is seeking clarification on Input Tax Credit (ITC) for goods purchased at a higher price but sold at a significantly lower value due to multiple rentals. The consensus is that ITC is generally allowed, provided the conditions under GST law, including those related to GSTR-2B, are met. The GST paid during the rental period also allows for ITC.

Sandeep Jain

Pivate

1492 Points Posted on 21 August 2022

Itc allowed

Sai Allu

754 Points Posted on 21 August 2022

ITC value can be reduced from the GST payable on the sales by the taxable person only after fulfilling some conditions. These conditions given under the GST law are more or less in line with the pre-GST regime, except for a few additional ones such as GSTR-2B. These rules are direct and maybe stringent in nature.