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GST on amount written off, Goods and Services Tax - GST

Issue Id: - 115297
Dated: 8-8-2019
By:- Kaustubh Karandikar
GST on amount written off

  • Contents

XYZ sold material to export customer (non-related party) in 2016 and also the export formalities like filing proof of export has been completed in 2016 only. XYZ not received 15% amount from customers against these materials. The customer is now bankrupt and will not pay this 15% amount. XYZ are in the process of making provisions for bad debts for amount not receivable. After taking approval from bank, they will write off this amount in books of accounts.

1) Whether GST will be applicable on provisions for bad debts for non-related party?

2) Whether GST will be applicable on write off of amounts not receivable from customers.

3) Is proportionate ITC is required to be reversed to the extent of amount not received?

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Posts / Replies

Showing Replies 1 to 4 of 4 Records

1 Dated: 8-8-2019

Query-wise views are as under:-

It is an undisputed fact that the whole quantity of goods stands sold and exported and you have documentary proof to this effect. Although 15% amount has not been received, yet the whole consignment is to be treated as exported. De facto, exported goods are also to be considered as duty-paid goods.

1. GST is not applicable on the amount of bad debt. Not covered Section 15 regarding transaction value.

2. GST is not applicable on this ground also. Not covered under Serial No 5 (e) of Schedule-II.

3. Proportionate ITC is not required to be reversed as it is not write-off of inventory value. Such write-off is not covered by Section 17(5) (h) of CGST Act.

Exportation saves you in respect of all three aspects.

2 Dated: 9-8-2019

Export benefit is taken in respect of said transaction need to rerun to of non recoverable amount from customer.

3 Dated: 10-8-2019

In my view, except rebate/refund all other benefits are available. Duty cannot be demanded.

4 Dated: 12-8-2019

MEIS & DBK also recoverable


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