GST ON DAMAGED GOODS

Save Share

This query is : Resolved

Priyanka Roy (Querist)
Follow

23 June 2026 WHENEVER RETURN DAMAGE GOODS TO SUPPLIER . THEY DENIED TO RETURN THE GST AMOUNT. WHY IT IS HAPPENED. WHAT IS THE LEGAL RULE AND ACCOUNTING TREATMENT .. PLEASE SUGGEST

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
Follow

23 June 2026 The Rule: Returns should ideally be handled via a Tax Credit Note issued by the supplier under Section 34 of the CGST Act, which allows them to adjust the GST.

The Reason for Denial: The supplier might refuse because the legal time limit (November 30 of the next financial year) has passed, or they are unwilling to adjust their GST filings.

The Impact on Buyer: Even if the supplier denies the GST refund, the buyer must reverse the Input Tax Credit (ITC) since the goods were returned. The unrefunded GST amount should be debited as a business expense/loss in the accounting books.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now