Dear all,
Sales returned item and to be disposed off.
what about the ITC claimed on raw material of which used to manufacturing this FG.
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ITC on sales return.
Replies (3)
Hi,
You cannot claim ITC on goods that are to be disposed off as per "Section 17(5)(h) of CGST Act". ITC claimed on raw materials used to produce those goods need to be reversed.
But some observation are found that in the case of fresh invoice issue by buyer, which considered as a supply so we have to reverse the tax paid against the sale only. no need to reverse the ITC of raw materials.
You can reverse only the amount equivalent to the one which you have paid while selling the scrap or the amount of GST which you have paid to your vendor whichever is less
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