According to Rule 39ka of VAT Regulation, 2053, in case there is a loss of assets due to fire, theft, accident, riot, accidental damages, terror, the person shall submit an application to the tax officer within 30 days of the happening of such events along with the evidences required.
Here, the tax officer may investigate and inspect the places of happening and decide the amount of input VAT credit which has already been claimed of such assets.
In the given question, the assets has been insured. So where the assets has been insured, the tax officer shall allow the tax payer to claim input VAT credit on such goods to the extent of compensation paid by the Insurance company without any investigation.
When the tax payer do not file the application within 30 days of happening of such events, the tax officer on the inspection may find that there is a shortage of stocks. Hence, as per Rule 40 the officer may levy VAT on stock shortage.
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