Question27: We are manufacture of Polyester Yarn and Registered under GSTN .
It is to inform you that in April 2016, i.e. prior to GST , a fire accident took place in our factory and due to which the plant & Machinery including building Fixtures were damaged and the same was reported by us to the
Central Excise Dept.
Now, we want to clear salvages of Plant & Machinery , Building Fixtures etc. and Salvages of Excisable Finished goods which was damaged and not in position to sale in open market.
We request you to kindly clarify on following points ;-
1.How to clear P & Machinery as it would be sold on as is where is bases in a lot and the salvages will be cleared in piece meal bases but we cannot make valuation of each and every consignment as the value is fixed as per the tender for a complete lot and the quantum of the salvages are into bulk so the same cannot be accommodate in single vehicle. We request you to advise how to discharge duty for such salvages which will be cleared in lots and what type of documents should be accompany while transit of such salvages .
2.If we clear salvages of damaged Finished Goods ( Yarn ) which was excisable goods and we have availed Cenvat Credit of Raw materials from which the polyester yarn was manufactured . What is the modus operandi for removal of damaged finished stock due to fire accident '
We request you to please guide us on the above issues.

Answer First point comes is the question of classification & rate of tax since you are taking lump sum price according to tender for supply of all types of salvage. therefore it will be covered under definition of mixed supply and accordingly the tax will be the Highest rate of tax applicable to any item of salvage which is sold in mixed supply . In this case it may be 18% because if you are taking lump sum prices for waste of many items then there are chances that at least one of waste item may attract tax @ 18% or more.
Point wise reply of your query is as follows:-

1. As far as movement of bulk consignment of single invoice in multiple vehicle is concerned, the procedure of E-way bill has been clarified in FAQ as follows:-
Where the goods are being transported in a semi knocked down or completely knocked down condition, the EWB shall be generated for each of such vehicles based on the delivery challans issued for that portion of the consignment as per CGST Rule 55 which provides as under:
(a) Supplier shall issue the complete invoice before dispatch of the first consignment;
(b) Supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice;
(c) each consignment shall be accompanied by copies of the corresponding delivery challan along with a duly certified copy of the invoice; and
(d) Original copy of the invoice shall be sent along with the last consignment
Please note that multiple EWBs are required to be generated in this situation. That is, the EWB has to be generated for each consignment based on the delivery challan details along with the corresponding vehicle number.

2. According to the provisions of Section 7(1) of CGST Act, 2017 all forms of supply of goods or services or both such as sale , transfer, barter, exchange, licence, rental, lease or disposal etc. made for a consideration by a person in furtherance of business would be covered under the term 'Supply'
Accordingly the same would be leviable to tax under the GST regime at the appropriate rate applicable according to relevant HSN Code, irrespective of the fact whether the product is damaged or credit of input has been availed or not.

Thus the procedure for supply of damaged yarn for consideration is same as any other supply by registered person under GST. (Reply dt. 10/4/2018)