GST Landmark Case Law: No Reversal of ITC in Respect of Loss of Inputs During a Manufacturing Process

ARS Steels & Alloy International Pvt. Ltd. Vs State Tax Officer (Madras High Court)

GST Landmark Case Law: Hon. Madras HC – Section – 17(5)(h) of CGST Act – No Reversal of ITC in Respect of Loss of Inputs During a Manufacturing Process

The petitioners are engaged in the manufacture of MS Billets and Ingots. MS scrap is an input in the manufacture of MS Billets and the latter, in turn, constitutes an input for manufacture of TMT/CTD Bars. There is a loss of a small portion of the inputs, inherent to the manufacturing process.

The impugned orders seek to reverse a portion of the ITC claimed by the petitioners, proportionate to the loss of the input, referring to the provisions of Section 17(5)(h) of the GST Act.

The impugned assessment orders reject a portion of ITC claimed, invoking the provisions of clause (h) which relates to goods lost, stolen, destroyed, written off or disposed by way of gift or free samples.

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