ITC on inputs used in manufacturing expired cakes & pastries is not admissible & required to be reversed: Gujarat AAR

Question

Whether or not there is requirement for reversal of input tax credit on goods used as raw material in manufacturing of expired cakes & pastries that were kept in display for use in course or furtherance of business?

Ruling

• As per Section 17(5)(h) of CGST Act

17(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:—

….

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

• ITC on inputs used in manufacturing expired cakes & pastries is not admissible and required to be reversed.