CAF-2 · Chapter 18 · Question 8 of 15
If a customer returns goods to the supplier and the goods are found to be completely unfit for consumption and must be destroyed, what is the legal requirement for destroying the goods and adjusting the input tax?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) The goods must be destroyed after obtaining permission from the Collector of Sales Tax, and the input tax credit in respect of such destroyed goods shall not be admissible.
Explanation
Goods unfit for consumption shall be destroyed after obtaining permission from the Collector of sales tax, under the supervision of an Inland Revenue officer, and the input tax credit in respect of goods so destroyed shall not be admissible.
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