Goods and Services Tax – Started By: – Ramaswamy S – Dated:- 23-8-2018 Last Replied Date:- 28-8-2018 – Section 17(5)(h) of the CGST Act, 2017 says that the ITC is not allowed if the stock is written off in the books of accounts. Rule 3(5B) of Cenvat Credit Rules says that the Credit is to be reversed if the stock is written off fully or partially or provision is made in the books of accounts partially or fully. Further, the CCR provided the recredit of credit reversed already whereas there is no such provision in the GST. There is a difference in the two provisions. Whether this omission is a unintentional or delibrate? Whether the ITC is to be reversed in case if provision is made to write off in the books of accounts. If this is an unint
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if stock is written off in the books it has to be considered for reversal of credit. If you differ with my view, kindly share sir. – Reply By Ramaswamy S – The Reply = Thank you sir for your views. Hitherto, the benefit of doubt is to be given to the assessee and not the revenue. The latest Apex Court ruling has reversed the same. It is the same old officers in the department whose mind set is yet to change and will err on the revenue side and issue notice for the same. From the plain reading, it is not includible. However, with the litigation, the Govt can either provide an explanation stating that the words : written off includes provision to write off.In such a case, if considered clarificatory has a retrospective effect or if considered
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n sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. In Section 17 (5) (h) of CGST Act, 2017 the words and phrases where any provision to write off fully or partially has been made in the books of account is absent. Therefore only when the inputs and/or capital goods are written off fully input tax credit availed on such inputs and/or capital goods is to be paid back. Therefore, in my opinion, where any provision to write off fully or partially has been made in the books of account the ITC availed need not be reversed. Regarding litigation you can move your jurisdictional High Court or
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