Tax liability on unsold goods

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3 Points Posted on 19 January 2024

hi,

Is there tax liability on unsold goods? e.g. a distributor has expired or damaged goods which the supplier/mfr does not accept. these goods are unsaleable, however since the ITC is availed is there a tax liability on these goods? Will reversing ITC claimed absolve us of the tax liability? thanks in advance

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On 19 January 2024 at 15:14 Report
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"Do the Right Thing...!!!"
128152 Points Posted on 19 January 2024
In general view... Yes, Tax will reversible.

But, as you said both of different situations. So, it's not applicable to the same as both...
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On 19 January 2024 at 15:29
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Profession Business
28244 Points Posted on 19 January 2024
I do not find reason of reversing the tax liability.
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On 19 January 2024 at 15:56
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53 Points Posted on 20 January 2024
In India, if goods become unsaleable due to reasons like expiration or damage, and you have already availed Input Tax Credit (ITC) on these goods, there may be a tax liability. Reversing ITC claimed can help mitigate the tax liability, as it essentially means you are adjusting the credit previously taken.
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On 20 January 2024 at 17:49
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28244 Points Posted on 20 January 2024
You hv to pass the debitbnote with necessary intimation to the supplier to lift the goods. if the supplier is not eager then you can easily arrange for the same and pass entries.
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On 20 January 2024 at 21:58

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