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GST on Loss of Goods due to flood

Ninad Taralekar (83 Points)

02 December 2019

Do i need to pay GST on Insurance claim received due to loss of goods in flood?

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10 Replies

CA Ankit R Momaya (Partner at Bhat Momaya & Associates) (2310 Points)
Replied 02 December 2019

No GST is not Applicable on Insurance Claim Received.

Ninad Taralekar (83 Points)
Replied 02 December 2019

@ ankit momaya.... What are the grounds for your answer sir?

CA Ankit R Momaya (Partner at Bhat Momaya & Associates) (2310 Points)
Replied 02 December 2019

Receipt of Claim is not a Supply in accordance with GST Act

Raksha (Student CA Final ) (397 Points)
Replied 02 December 2019

It does not cover under the definition of supply u/s 7 Hence no GST is leviable on insurance claim.

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JATIN DUGGAL (CHARTERED ACCOUNTANT IN PRACTICE) (406 Points)
Replied 03 December 2019

@ Ninad Taralekar

ITC needs to be reversed in case of goods lost in terms of provisions of Section 17(5)(h) of the CGST, Act, 2017. File DRC-03 for the same and reverse the ITC availed on such goods at the time of purchase.

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Ninad Taralekar (83 Points)
Replied 03 December 2019

@ Jatin Duggal,

Yes sir i am very much clear about reversal provision. My query is specifically regarding insurance claim received for the loss.

Because lets suppose my total loss is of Rs. 20lakh. Out of which for Rs. 5 lakh i recovered Rs. 1 lakh through scrap so for this Rs. 5 lakh i dont need to reverse ITC. & Insurance company settled my 20 lakh claim for Rs. 6 lakh. My remaining loss is of Rs. 9 lakh on which i reversed the ITC. SO now for that Rs. 6lakh do i need to pay GST?

CA Chandra Prakash (9873059766 Increasing knowledge through sharing) (296 Points)
Replied 04 December 2019

Yes, either you can pay GST on Rs. 6 Lakh or reverse GST input on 6 Lakh. As per my view.

Dip Narayan (Deputy Manager) (767 Points)
Replied 05 December 2019

What the supplier has to do? Supplier has supplied the material with payment of GST. Can he avail the ITC.

Rachel (USA) (24 Points)
Replied 13 May 2021

I apologize for being a little off-topic; I wanted to consult you.

Rachel (USA) (24 Points)
Replied 13 May 2021

Originally posted by : Rachel
	I apologize for being a little off-topic; I wanted to consult you.

So, I have a small flower shop. Recently, during the rain, the shop was flooded. Water got on the electrical wiring, and the lights went out all over the building. We called the electricians. They fixed everything, but they said that it was due to a violation of the design of the rainwater drainage system. Also, later we called the service for drying and cleaning the carpet https://majesticflooddamagerestoration.com.au/carpet-drying-ballan/. I believe that the architect made a mistake that caused the flood, and we have the right to demand compensation from the owner of the building. I would like to hear your opinion on this issue.