What to do with taxes at the time of loss in GST law?

- Sales Tax-Soham Masruwala

Under Section 17 of the GST Act, provision has been made for refund of tax credit under special circumstances, one of which is the case where the goods have been destroyed. This matter is discussed in today's article. For the government to act like collecting taxes indiscriminately.

Provision of section 17 (5).

Refund of tax is due when any goods are destroyed or lost or stolen or misappropriated.

the finish

Under Section 17, the tax credit is to be refunded when the goods are destroyed, in case the trader is manufacturing the raw material as well as the final goods, when the final goods are destroyed, the tax credit is to be refunded on the inputs included in it. When it is destroyed in the semi-finished stage, the input used for manufacturing the goods at such stage is refundable. Inputs lose their independent identity production process.

In such a case, if the manufactured goods are destroyed, the dispute as to how the tax credit is to be refunded should generally be taken into account as per the consumption of the goods for production or as per the bill of materials and it is very important that part of the raw material is absorbed into the manufactured goods. come In this regard, the Supreme Court in State of Madras Vs. SWASTIK TOBACCO FACTORY CHAI 1966 dispute can be dealt with on the basis of 1000 tongues but there is no notification in this regard by the account and the approach is taken to refund all the tax credits whether visible or not.

Normal loss

Under the Gujarat Tax Act, the amount of loss is fixed only for Petrol-Diesel and if it falls more than that, the tax has to be refunded. There is no such provision in the GST Act. Further, no tax credit shall be refundable for general loss, when the item is destroyed during research and development while making a new item, no tax credit shall be refundable under Section 17 (P).