GST impact on material expired

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This query is : Resolved

Quick Summary

If you've purchased materials, claimed GST input tax credit, and they later expired due to unforeseen circumstances like lockdowns, you'll need to reverse that input credit. According to Section 17(5)(h) of the CGST Act, 2017, goods that are destroyed or written off are ineligible for input tax credit. Therefore, you must reverse the ITC already availed for the expired stock.

Sanjay Roy

Sanjay Roy (Querist)

25 May 2020 Dear Sir,

I purchased some materials in the earlier month of this calender year and have already taken the GST input against that purchase while filling the return. But due this pandemic and lockdown and closure of establishments the material got expired. The same can't to be sold.

But as mentioned above already taken the input for the same. What will the course of action in this case. Please reply.

Thanking you,

Dependably yours

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

25 May 2020 Reverse ITC taken on it.

CA AMIT JAKHWAL

CA AMIT JAKHWAL (Expert)

26 May 2020 Dear Querist,
As per section 17(5)(h) of the CGST ,Act,2017 which is reproduced below:
(h) goods lost,stolen,destroyed,written off or disposed of by way of gift or free samples ;

ITC shall be blocked. Accordingly in your query, in case you have already availed the ITC you need to reverse the ITC.

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