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ITC reversal rules for destroyed raw materials and finished goods
Case Law Details
- Case Name
- In re Geekay Wires Limited (GST AAR Telangana)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- AAR Telangana, Advance Rulings
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In re Geekay Wires Limited (GST AAR Telangana)
The GST AAR Telangana has recently addressed key questions raised by M/s. Geekay Wires Limited regarding the eligibility of input tax credit (ITC) in situations involving destroyed raw materials and finished goods. This ruling sheds light on the ITC reversal rules and their application in such scenarios.
Background: M/s. Geekay Wires Limited is engaged in the manufacturing of steel nails and related products. Their manufacturing process involves the use of various raw materials, including steel wire rods, polypropylene, copper wir...
In all the cases, ITC is required to be reversed, as per Advance Ruling. There were CESTAT judgements, wherein it was held that once the inputs are used in the process and finished goods were destroyed thereafter, there is no need for reversal of CENVAT credit.
The advance ruling is contradictory to CESTAT judgements. Better not to opt for advance rulings.