GST ON DAMAGED GOODS
This query is : Resolved
Priyanka Roy
(Querist)
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
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.
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.
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