Debit note raised by customer due to material defects.

This query is : Resolved

SATHYA M (Querist)
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10 June 2019 Hi!

I need a clarification.
Our customer have raised debit note for Material rework done by them due some manufacturing defect . For that, they incurred labour charges of some amount. (For ex: Labour charges : 20000/-) They submitted debit note inclusive GST.

How to treat is debit note from my side.

I have to raise Credit note or I have to show in Manufacturing expenses.

Kindly clarify me.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 June 2019 Raise credit note...........................

SATHYA M

SATHYA M (Querist)
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12 June 2019 Thanks for your Valuable Reply. Credit note raised, but here they have debited Manufacturing Expenses instead of Sales. Is it correct.
Moreover, it is not showing in GSTR1 Report

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 June 2019 Being rectification charges it can be debited to manufacturing expenses.

SATHYA M

SATHYA M (Querist)
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12 June 2019 Could you explain it Sir.
It is debited in Manufacturing Expenses, but it is not reflecting in GST Report?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 June 2019 Being debit note issued adjust in sales not to manufacturing account.

SATHYA M

SATHYA M (Querist)
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12 June 2019 Thanks for your Valuable reply sir