GST on Goods Lost by Theft

Video Tutorial by CA Satbir Singh (Voice in Hindi , Slides in English)  explaining GST on Goods Lost by Theft

We are in the business of electronic goods. We bought goods on which we claim ITC. Subsequently, the same were stolen by one of our employee. We have filed FIR for the same and the case is under investigation.

1. Do we have to pay GST on the goods stolen?

2. Do we have to reverse ITC for the goods stolen?

3. In case of reversal do we have to pay any interest?

My Comment

1. You have to Reverse Input Tax Credit on Goods Lost by theft.
2. No need to pay interest if you reverse Input Tax credit immediately, Otherwise Interest is required to be paid

Reversal of Input Tax Credit on Goods Lost by Theft

Relevant Portion of Section 17(5) of CGST Act  :-

(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub- section (1) of section 18, input tax credit shall not be available in respect of the following, namely:—

……..

(h)

goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and

GST Interest Rates for wrong Input Tax Credit / Reduction in output Tax Liability

A taxable person who makes an undue or excess claim of input tax credit under sub- section (10) of section 42 or undue or excess reduction in output tax liability under sub-section (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at at such rate not exceeding twenty-four per cent, as may be notified  by the Government on the recommendations of the Council. – Section 50(3) of CGST Act .

The Interest Rates is 24%  w.e.f 01.07.2017  under Section 50(3) of CGST Act vide Notification No. 13/2017 – Central Tax Dated 28th June, 2017 and Notification No. 6/2017-Integrated Tax dated 28-6-2017. 

Related Post on Input Tax Credit

• Input tax Credit on capital goods purchased before GST Registration
• Input Tax Credit in GST ( India )
• When you Can not Claim ITC under GST
• Last date to claim Input Tax Credit for FY 2017-18 under GST
• Example on Rule 5 of GST Input Tax Credit Rule – ITC on Capital Goods
• Example on Rule 7 of GST Input Tax Credit Rule – Inputs Partly used for business and partly for other purposes
• Example Rule 8 of GST Input Tax Credit Rule – Capital Goods Partly used for Business and partly for other purposes
• Example Rule 9 GST Input Tax Credit Rules – Reversal of ITC on Inputs & Capital Goods
• Video : GST Input Tax Credit wrongly availed : GST News [Part 228]
• Video : GST ITC 4 : Goods to Job Worker :GST News [ Part 166 ]

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