Celebrate CA Day with CAclubindia PRO. Use Code: CADAY10 Subscribe Now!

ITC on sales return.

SHAHHUL IQBAL (article assisstant) (56 Points)

16 February 2021

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.

Reply
Follow
Share

3 Replies

Dasharath Rao (Student) (25 Points)
Replied 16 February 2021

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.

SHAHHUL IQBAL (article assisstant) (56 Points)
Replied 16 February 2021

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.

Bhavika Kothari (CA) (1258 Points)
Replied 27 February 2021

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