The document provides information on loss assessment and GST implications related to insurance claims. It discusses key points like whether insured can claim double benefit of ITC and indemnification, treatment of GST in loss amount, ITC eligibility and conditions. It elaborates on blocked credits and issues in loss assessment like impact of no ITC reversal. The document also contains an example of stock loss assessment showing calculation of gross loss, underinsurance deduction, net loss assessed with and without considering GST. It provides a template for CA/CMA certificate for ITC reversal.

1. Loss Assessment & GST implications
Lucknow, IIISLA Training Programme, 29th & 30th April, 2023
CMA Shiba Prasad Padhi
Surveyor & Loss Assessor & Practicing Cost Accountant
Bhubaneswar, Odisha
e. shibappadhi2@gmail.com, m. 99384 59525, WhatsApp. 87634 13213
Disclaimer –
Discussion made is based on my understanding of the law.
Related provisions, exceptions, Notifications are to be referred by an SLA where ever required.

2. Basic understanding
• GST - Tax cost to be indemnified
• Tax Invoice, BoS, Debit Note, DC, e-Waybill, Credit Note
• Registration
• Regular & Composite Taxpayer, QRMP
• GSTR 3B, 1, 2A, 2B, 9, 9C, CMP-08, 4
• Checking Status of a Taxpayer
• ITC
➢ Availing & Utilizing
➢ Conditions to satisfy
➢ Blocked Credit
➢ Not available e.g. Hotel
➢ Reversal – Procedure & Due Date
➢ Bill to Ship to
➢ Works Contract – If not capitalised
➢ Banking and Insurance Industry
➢ P&M

3. Ramisengagedintradingof Computer
Hehasa ShopatLucknow
Hepurchasescomputersandperipherals
Heisregisteredasa RegularTaxPayer
GSTrateonComputeris18%
TaxableValue CGST SGST IGST TotalGST InvoiceValue
Purchasesmade- Inwardsupply
a. Computer-5nos. purchasedfromLucknow 2,00,000 18,000 18,000 36,000 2,36,000 EligibleITC
b. PeipheralslikeKeyBoard,Mouseetc. purchasedfromDelhi 80,000 14,400 14,400 94,400 EligibleITC
c. RentpaidforShop 20,000 1,800 1,800 3,600 23,600 EligibleITC
d. FoodorderedforanOfficeParty 5,000 125 125 250 5,250 NoteligibleforITC
e. Purchaseda CarforOfficeuse 8,00,000 1,12,000 1,12,000 2,24,000 10,24,000 NoteligibleforITC
Total 11,05,000 1,31,925 1,31,925 14,400 2,78,250 13,83,250
TaxableValue CGST SGST IGST TotalGST InvoiceValue
Salesmade- Outwardsupply
a. Computer-8nos. 4,50,000 40,500 40,500 81,000 5,31,000
b. PeipheralslikeKeyBoard,Mouseetc. 50,000 4,500 4,500 9,000 59,000
Total 5,00,000 45,000 45,000 - 90,000 5,90,000
OutwardTaxLiability forRam 45,000 45,000 - 90,000
RamisalsoeligibletosetoffITC 19,800 19,800 14,400 54,000
ForthemonthofMarch, 2023

4. Conditions to satisfy
• GST paid by a recipient registered taxpayer on inward supply of goods or services
or both made to him by another registered taxpayer.
• Such goods or services are used by the recipient in the course or furtherance of
his business.
• The recipient is in possession of GST compliant tax Invoice or a Debit Note as
issued by the Supplier against such supply of goods or services.
• The recipient has received the goods or services so supplied to him
• The supplier has paid GST and filed GST Return for such outward supply made by
him.
• The supplier has not opted for the Composition levy scheme.
• The recipient has cleared the payment of the supplier within one hundred eighty
days from the date of the Invoice.
• Matching with GSTR 2B
• If it is not blocked otherwise

5. Conditions to satisfy
• In case goods are received in lots or installments, ITC available after receiving the
last lot
• If depreciation is claimed on tax component of CGs for IT purpose, then no ITC
• No ITC after 30th November of next year or filing AR, whichever is earlier
• Proportionate ITC if inward supply of G/S used partly for business purpose
• Proportionate ITC in case of both Zero-rated and exempt supplies
• Banking Co./FI/NBFC engaged in accepting deposits, extending loans/advance –
either proportionate ITC or 50% of eligible ITC on inputs, CGs and input services

6. Blocked Credits
a. motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including
the Driver) except when they are used for –
- Further supply of Motor Vehicles;
- Transportation of passengers
- Imparting training on driving
Servicing, R&M relating to motor vehicle is also blocked.
b. food and beverages, outdoor catering.
c. membership of a club, health and fitness centre.
d. rent-a-cab, life insurance and health insurance.
e. travel benefits extended to employees on vacation such as leave or home travel concession.
f. works contract services when supplied for construction of an immovable property (other than plant and machinery) except
where it is an input service for further supply of works contract service.
g. goods or services or both received by a taxable person for construction of an immovable property (other than plant or
machinery) on his own account including when such goods or services or both are used in the course or furtherance of
business.
Construction includes re-construction, renovation, additions, alterations, repairs, to the extent of capitalization, to the said
immovable property.
h. goods or services or both on which tax has been paid under Composition Scheme.
i. goods or services or both received by a non-resident taxable person except on goods imported by him.
j. goods or services or both used for personal consumption.
k. goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and
l. Fraud, willful mis-statement.

7. Issues relating to loss assessment
• Should an insured be allowed to take double benefit?
i.e. availing ITC as well as getting indemnified from Insurer for the GST amount?
• Should GST be a part of Gross Loss Amount?
• What if the Insured declare that he has not availed ITC?
i.e. GST amount capitalized in case of P&M
• When should an insured be indemnified for the GST paid by him?
• Impact of ‘No Reversal’
• How to ensure reversal of ITC in case of goods lost, stolen or damaged?
- GSTR 3B with a Certificate by CA/CMA with UDIN, if not wait till filing of Sept. return
• What in case of Under insurance and Double Insurance?
• P&M – 60 months
• Stock at Risk at Invoice Value
• Input GST in case of loss of FG/WIP
• E-Way Bill
• Process Loss/Loss during manufacturing
• Repairing of Building by Insured
• Sale of scrap/Salvage
• Registration Certificate – Place of Business

8. Description Taxable Value GST Total
Mobile Phone 19,62,846 3,53,312 23,16,158
Home Appliances 6,99,482 1,82,818 8,82,301
Total 26,62,328 5,36,131 31,98,459
Loss Amount considered before deduction for Credit Note for Discounts, Incentives & Schemes
Amount GST @ 18% Value
23,03,642 4,14,656 27,18,297
59,84,803 13,41,410 73,26,212
82,88,444 17,56,065 1,00,44,510
Home Appliances
Description of item
Total
Summary of Stock at Risk
Mobile

9. Stock of
Mobile
Phones
Stock of
Home
Appliances
Total
Loss Amount (as derived separatley) 23,16,158 8,82,301 31,98,459
Less: Deduciton for Credit Note for discounts, Incentives and
Schemes @ 4.24%
98,205 37,410 1,35,615
Gross Loss Amount considered for Assessment 22,17,953 8,44,891 30,62,844
Less: Depreciation (NIL being burglary of Saleable stock) - - -
Loss amount after deduction Depreciation 22,17,953 8,44,891 30,62,844
Less: Salvage - - -
Loss amount after deduction Salvage & Depn. 22,17,953 8,44,891 30,62,844
Sum Insured for Stock of Mobile Phones & Home Appliances 15,00,000 60,00,000 75,00,000
Stock At Risk 27,18,297 73,26,212 1,00,44,510
Underinsurance 12,18,297 13,26,212 25,44,510
% of Underinsurance 44.82 18.10 25.33
Less: Deduction due to Underinsurance 9,94,051 1,52,945 11,46,996
Loss Amount after deduction Underinsurance 12,23,902 6,91,946 19,15,848
Less: Policy Excess (NIL for Burglary as per Policy) -
Net Loss Amount Assessed (including GST) 19,15,848
3,21,137
15,94,711
Less: GST Amount for the stolen stock not allowed as the Insured is eligible to take
ITC on the same. The same may be paid to him upon reversal of the same and
submission of GST Returns and other documentary evidence by him subsequently
(Calculation given as under)
Net Loss Amount Assessed (excluding GST)
With GST - ITC availed but to be reversed

10. Proportionate GST ITC to be indemnified
Amount TaxableValue GST
Loss Amount derived 31,98,459 26,62,328 5,36,131
Less: DeducitonforCredit Note fordiscounts,IncentivesandSchemes@4.24% 1,35,615 1,12,883 22,732
Gross Loss Amount consideredforAssessment 30,62,844 25,49,445 5,13,399
Less: Deductionof Underinsurance 11,46,996 9,54,734 1,92,261
LossAmountafterdeduction of Underinsurance 19,15,848 15,94,711 3,21,137

11. Stock of
Mobile
Phones
Stock of
Home
Appliances
Total
19,62,846 6,99,482 26,62,328
83,225 29,658
1,12,883
18,79,621 6,69,824 25,49,445
18,79,621 6,69,824 25,49,445
18,79,621 6,69,824 25,49,445
15,00,000 60,00,000 75,00,000
23,03,642 59,84,803 82,88,444
8,03,642 - 8,03,642
34.89 - 9.70
6,55,719 6,55,719
12,23,902 6,69,824 18,93,726
18,93,726
Without considering GST

12. Stock of
Mobile
Phones
Stock of
Home
Appliances
Total
Stock of
Mobile
Phones
Stock of
Home
Appliances
Total Difference
Loss Amount (as derived separatley) 23,16,158 8,82,301 31,98,459 19,62,846 6,99,482 26,62,328 5,36,131
Less: Deducitonfor Credit Note for discounts,Incentives and
Schemes @ 4.24%
98,205 37,410 1,35,615 83,225 29,658
1,12,883 22,732
Gross Loss Amount considered forAssessment 22,17,953 8,44,891 30,62,844 18,79,621 6,69,824 25,49,445 5,13,399
Less: Depreciation(NIL beingburglary of Saleable stock) - - - -
Loss amount after deductionDepreciation 22,17,953 8,44,891 30,62,844 18,79,621 6,69,824 25,49,445 5,13,399
Less: Salvage - - - -
Loss amount after deductionSalvage & Depn. 22,17,953 8,44,891 30,62,844 18,79,621 6,69,824 25,49,445 5,13,399
SumInsuredfor Stock of Mobile Phones & Home Appliances 15,00,000 60,00,000 75,00,000 15,00,000 60,00,000 75,00,000 -
Stock At Risk 27,18,297 73,26,212 1,00,44,510 23,03,642 59,84,803 82,88,444 17,56,065
Underinsurance 12,18,297 13,26,212 25,44,510 8,03,642 - 8,03,642 17,40,868
% of Underinsurance 44.82 18.10 25.33 34.89 - 9.70 15.64
Less: Deductiondue to Underinsurance 9,94,051 1,52,945 11,46,996 6,55,719 6,55,719 4,91,276
Loss Amount after deductionUnderinsurance 12,23,902 6,91,946 19,15,848 12,23,902 6,69,824 18,93,726 22,122
Less: Policy Excess (NIL for Burglary as per Policy) - -
Net Loss Amount Assessed (including GST) 19,15,848 18,93,726 22,122
3,21,137
31,98,459 26,62,328 Difference
15,94,711 65,278 57,773 7,506
Less: GST Amount forthe stolen stock not allowed as the Insured is eligible to take
ITC on the same. The same may be paid to him upon reversalof the same and
submission of GST Returns and otherdocumentary evidence by him subsequently
(Calculation given as under)
Net Loss Amount Assessed (excluding GST)
With GST - ITC availed but to be reversed Without considering GST
Survey Fees-Fire Claim

13. Template – Certificate by a CA/CMA
This is to Certify that I have gone through and verified monthly return GSTR 3B as
filed by Mr. Ashok Kumar, Proprietor of Smart Motors, having GSTIN
21XXXXB6006N1Z9 for the period January, 2021 to September, 2021 and found
that Mr. Ashok Kumar has not availed Input Tax Credit in respect to inward supply
made to him vide Repair Invoice No. IEXIJA2021003409, Dated 09.01.2021 for
Vehicle No. OD 07 AC 2621, having Taxable Value of Rs……………….., CGST Amount of
Rs…………. and SGST Amount of Rs………………….., even though he is eligible to avail
the ITC as per provisions of GST law as Vehicle No. OD 07 AC 2621 is used for
transportation purpose.
Mr. Ashok Kumar is no more eligible to avail ITC for inward supply made to him
vide Repair Invoice No. IEXIJA2021003409, Dated 09.01.2021 against Vehicle No.
OD 07 AC 2621, after filing GSTR 3B for the month of September, 2021 which was
filed by him on dtd. ……………… Certified copy of all GSTR 3B is attached herewith.
CA/CMA …………………
UDIN