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Stock written off

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Stock written off

Post by emhan on Wed Apr 08, 2015 10:32 am

Hi

Wish to clarify on the following :-

1) we have 2 types of stock bought in
a) Stock in and out when sold to customers
b) Once stock in, it is immediately charged out to expenses as samples/ product under warranty period.

For b) should we account for GST once the stock is written off from stock list than monitoring the stock under expenses (sample/ product warranty expenses) when later they are given away to customers either as gift / product replacement ?

Can we put the tax code as DS?

Thank you.


emhan

Posts : 20
Join date : 2015-02-24

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Re: Stock written off

Post by joseph on Wed Apr 15, 2015 6:04 am

No need to account for GST if goods are given out as commercial samples (in a form not ordinarily available for sale to the public) or used for product replacement.

If not commercial samples, account for GST under Gift Rule.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

Posts : 277
Join date : 2014-09-25

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Re: Stock written off

Post by honeystar34 on Wed Apr 29, 2015 1:57 pm

hi, for damages stock -
if we had damages stock to write off, in which item purchase in apr'15,
thus we need to account for output tax
if damages stock w/off for stock purchase before apr'15, no need to account for output tax..
kindly advise if i'm wrong..
my concept is, if we had claim input tax previously, no sale & w/off ,
then we had to pay back which refer to output tax to government ..

honeystar34

Posts : 8
Join date : 2015-04-23

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Re: Stock written off

Post by joseph on Wed Apr 29, 2015 2:02 pm

Section 43(5)(d) of the GST Act 2014: where a taxable person fails to account for goods by reason that the goods have been lost or destroyed, the DG may assess the amount of tax that would have been chargeable in respect of the supply of goods if they have been supplied by him. This is an anti-avoidance provision.

If the loss is due to pilferage, theft, robbery, burglary etc and can be supported by police report, insurance claim, internal incident report, internal investigation report, stock loss report, CCTV recording etc, no need to account for GST.

If goods are destroyed or rejected by your customers, document the reason(s), support with correspondences, pictures etc. No need to account for GST. Any subsequent disposal of these destroyed/rejected goods are subjected to GST at the disposal value.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

Posts : 277
Join date : 2014-09-25

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Re: Stock written off

Post by honeystar34 on Wed Apr 29, 2015 3:57 pm

Hi Joseph,

thx for your reply, so in my case, stock expired / damaged / dented,
this is not subject to GST and no need to account for output tax ?



honeystar34

Posts : 8
Join date : 2015-04-23

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Re: Stock written off

Post by joseph on Wed Apr 29, 2015 4:39 pm

Keep proper documentation. As long as the reason is genuine, you don't need to account for GST.

Another good record will be correspondences (e-mails or otherwise) asking your supplier to take back the stocks and their reply (of not accepting the stocks).

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

Posts : 277
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Re: Stock written off

Post by honeystar34 on Thu Apr 30, 2015 8:18 am

million thanks to Joseph for your details explanation.

honeystar34

Posts : 8
Join date : 2015-04-23

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