TMI Blog2021 (1) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect and it states that the ITC shall not be available in respect of goods lost, stolen, destroyed or written off - Section 16 (1) of the CGST Act, 2017 provides that any registered person can avail credit of tax paid on the inward supply of goods or services or both, which is used or intended to be used in the course or furtherance of business. Since the said inputs and capital goods have been used in manufacture of finished goods that have been destroyed, the same are not used in course or furtherance of business. We, therefore, hold that the Input Tax Credit taken on the inputs used in the manufacture or production of goods i.e. intermediate dye and the Input Tax Credit taken on input services used in or in relation to the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iates are also sold by the Company in the market depending on the demand and pricing parameters. 4. Since dye intermediates were also destroyed in the fire, the Company hereby requests for clarification from the Advance Ruling Authority on following issue- Question- Whether the Company is required to reverse input tax credit on inputs consumed in dye intermediates (which is also a finished goods), where such goods have been destroyed in fire? Statement containing the applicant s view point and submissions on issues on which the advance ruling is sought 5. Section 2 of the Gujarat Goods and Service Tax Act, 2017 (herein after referred to as SGST Act ) provides for definition of various words. The relevant definitions are r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person 7. On a combined reading of Section 2 and Section 16 of SGST Act, 2017, it can be construed that the definition of input tax is very wide and a registered person is entitled to take input tax credit on inputs, input service and capital goods if the same are used by him in course or furtherance of his business or the registered person has an intention to use such inputs, input service or capital goods in the course or furtherance of his business at the time of procurement of such goods/ services. 8. However, such availment of input tax credit is subject to certain r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion in respect of as synonymous with the expression on . If excise duty was paid on raw tobacco, it can be attributable only to the raw tobacco and not to chewing tobacco. It was held that no deduction of excise duty is permitted to the assessee. The copy of judicial precedent is also furnished by them. 10. Applying the same ratio in interpreting Section 17(5) of SGST Act, it can be said that input tax credit shall not be available on inputs destroyed. Once the goods (inputs) are utilized in the manufacture of finished/intermediate goods (which can be further used for manufacture of finished goods), inputs have been said to be consumed and have lost its identity and have been used in course or furtherance of business. Once the finis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue under consideration was whether input tax credit is to be reversed on finished goods that got destroyed during the testing. The Maharashtra Authority held that once the inputs are used in the manufacture of final products, which are then sent for testing purposes, then in such a case the said inputs cannot be considered to have been destroyed. Once inputs are used, they cease to exist and the question of such inputs being destroyed, lost or stolen, etc. will not arise. The copy of advance ruling is attached as herewith Annexure D. 15. In the instant case, the issue for consideration is with respect to reversal of input tax credit on inputs consumed in manufacturing of Vinyl Sulphone, H Acid, M.P.D.S.A, C.P.C. Acetanilide Flakes, P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions under the GGST Act. 19. In this case, a moot point is to be decided regarding reversal of Input Tax Credit on inputs consumed in dye intermediates (which is also a finished goods) that was lying in stock and got destroyed in fire. 20. Few facts relevant for the present purpose, those are as follows: (i) The applicant is engaged in manufacturing and marketing of dyes and dye intermediates (Vinyl Sulphone, H Acid, M.P.D.S.A, C.P.C. Acetanilide Flakes, P.C.V.S.). They are having five manufacturing units situated at Kalamsar (Taluka-Khambhat), Vatva, Odhav, Sanand and Bharuch. (ii) A fire broke out in the night of 27th June, 2020 at around 8:40 PM in the warehouse of the Khambhat Unit of the applicant and raw material, int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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