Donation/Charity given in kind of goods for a defined/limited period and taken back the goods

In case where a registered person provided donation/charity in kind of goods ( machinery ) for a particular period of 2 years and as the period gets expire the same goods will be retunred by the beneficiary as it. There is no any consideration received in this case.

 

What is the vat treatement at first stage of donating and at the time of recovery of the same goods after 2 years.?

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SAJITH N21/04/2020 18:38:30

If there is no consideration received (even in kind) against goods donated, such supply would fall outside the scope of VAT. As a result input on the same will not be allowed to be claimed. If these are goods on which input was claimed previously then the supply as donation will amount to deemed supplies and VAT will have to be paid on the sale at a value equal to cost incurred on the goods (initial purchase price on which input was claimed). Subsequent return of such goods could also be regarded as out of scope however the time frame for claiming input on initial purchase would have expired in the event the goods are used for taxable supplies at a later date.

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Nusrat Abbas21/04/2020 19:49:05

If in case of RCM being applied hence also adjustment required in this case?

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SAJITH N21/04/2020 20:40:08

you mean input claimes via RCM? Then wud recommend go consider this as deemed supply or not claim the input in Box 10 if import pertains to current tax period

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