Dear Sir,

The best way to avoid any legal issues is to do the calculations accurately and follow the due process/procedure.  

You need to do it as it's legal obligation

Legally you may have to do it so, hence you may do it to some extent if it not possible to reverse ITC for all the wastage or perished goods.

Input tax credit under the goods and services tax framework allows businesses to set off tax paid on raw materials or input services against future tax liabilities. But this benefit is not available on goods that are stolen, lost, destroyed or distributed as free samples 

2)The restriction with respect to the destroyed goods is in section 17(5)(h) of the CGST Act and this provision of blocked credit has already been challenged the writ court. Blocked credits will have to be seen harmoniously with the objectives of GST and whether the procurements are intended to be used in the course or furtherance of business,”

Get the calculations done by a good CA.

This can be avoided.

Payment of ITC is better instead of ITC Reversal as per Section 17(5) due to the reason that ITC reversal will always be contentious issue and is higher than ITC availed on account of inclusion of ITC of services / capital goods also. So, safer to pay GST on FOC supplies and avail ITC.

1. The benefit of input tax credit under the goods and services tax framework cannot be availed on goods that are stolen, lost, destroyed or distributed as free samples.

2. This restriction has already been challenged in the High Courts but the Writ Petitions are still pending.

In your case, the benefit of ITC under GST shall not be  availed on goods which are lost, destroyed or perishable or distributed as free samples.

Further, the same has already been challenged / questioned by way of writ petition, and the same is pending adjudication.

Controversial issue but in my view, a registered person is not required to reverse ITC availed on raw materials used in manufacturing of finished goods which are written off or destroyed.

1. Yes you may have to reverse the benefits of Input tax credit.

2. You should contact some CA to avoid this situation, he will guide you better to avoid the reversal of ITC.

You have to give details of these too. You cannot escape it as there are things which get bad or expire and has to be informed.