CUSTOMER CREDIT NOTE

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This query is : Resolved

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This discussion addresses how a wholesale business in plastics and crockery should handle GST credit notes for damaged goods returned by retailers. The key concern is whether reducing GST liability via credit notes is permissible, especially when retailers don't provide proper documentation or maintain accurate accounts. The advice given is that there's generally no issue, provided the recipient retailer reverses any Input Tax Credit (ITC) they may have claimed on the original invoice. Confirmation from retailers regarding their ITC status is recommended.

VINOD KUMAR

VINOD KUMAR (Querist)
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06 August 2020 Sir, We are into wholesale business of plastics & crockeries. We used to bill to retail customer products. Few retailers return the materials damaged without documents and make reduced payments. We used to prepare CREDIT NOTE & account ourselves.
Now when we file GST Returns we used to less these taxes of returns and pay. Is there any issue ? moreover few retailers do not maintain properly books of accounts. How department will match the transaction ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 August 2020 1 No issue.
2 Dept will look for matching the return.

Lekhraj sood

Lekhraj sood (Expert)
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06 August 2020 One of the condition for reducing the GST liability through credit note is that the recipient should reverse the ITC availed by him on the relevant invoice.You need to get this confirmed from retailers if they are availing ITC. If they are not availing ITC then there should not be any problem.

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