GST : Expired cakes & pastries that were kept in display for use in course or furtherance of business of bakery being destroyed are covered under non obstante clause (h) of section 17(5) of CGST Act and thereby ITC on inputs used in manufacturing expired cakes & pastries is not admissible and required to be reversed
Cakes and pastry have limited shelf life and after expiry these bakery items are prohibited from sale. Section 7 of Prevention of Food and Alteration Act, 1954 prohibiting the sale of expired goods as such are not fit for consumption.
Further section 273 of Indian Penal Code criminalizes the act of sale of harmful perishable food products. Thus, act of throwing away expired cakes and pastries is akin to destroying the expired food products, for the applicant destroys by throwing them away.
Subject goods being destroyed are covered under non obstante clause (h) of section 17(5)of CGST Act and thereby ITC on inputs used in manufacturing expired cakes & pastries is not admissible and required to be reversed.
Ref: [2021] 130 taxmann.com 209 (AAR – GUJARAT)
AUTHORITY FOR ADVANCE RULINGS, GUJARAT
Kanayalal Pahilajrai Balwani, In re
SANJAY SAXENA AND ARUN RICHARD, MEMBER
ADVANCE RULING NO. GUJ/GAAR/R/16/2021
Dt: JUNE 30, 2021