Tax liability on unsold goods

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23 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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Quick Summary
This discussion addresses whether tax liability arises on unsold goods, such as expired or damaged items, especially when Input Tax Credit (ITC) has already been claimed. The consensus is that tax liability generally exists in such scenarios. Reversing the ITC claimed is suggested as a way to mitigate this liability, effectively adjusting the credit previously taken.

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"Do the Right Thing...!!!"
77792 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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19978 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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34 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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19978 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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