we are dealing in printing ink which has fixed shelf life. So my query is what should be done to gst taxes if that stock got expired and that is sold for very low value even below mrp or at scrap value. what should be rate of tax to be levied on sale bill of scrap. and whether gst to be reversed.
e.g purchase ink 10000/-
gst 18% 1800/-
sale scrao 2000/-
gst rate 18% 360/-
so what should be done to the balance tax 2000-360=1660
3 Replies
CA Sunil Kumar
(Chartered Accountant)
(4524 Points)
Replied 13 May 2018
As per Section 17(5)(h) input tax credit shall not be available in written off or disposed of. Thus, when the assessee actually writes off the goods in their books of account, then only, the GST credit on such inputs is required to be reversed in the GST regime.
ANKUR TAH
(Teacher Consultant and CA finalist.)
(543 Points)
Replied 13 May 2018
under section 17(5) deal with the blocked credit, that is ineligible for input tax credit. Lost, stolen goods etc. and evaporation is also fall under the blocked credit. When you written off those into the profit and loss account then you should also be reversed the GST paid on purchases.
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 14 May 2018
You have to reverse ITC in propotionate to written off
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