Gst return query

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This query is : Resolved

CA Parul Saxena (Querist)

02 September 2019 Please tell me what to do. Our customers returns material and they are showing in their GSTR1 as Sales to us. Is this practice correct? Whether we should also record this Sales return as Purchase?

Asiya Begum

Asiya Begum (Expert)

02 September 2019 This is the industry practice which is currently being followed. In case your customer is not issuing any credit note for the sales return and instead, they are raising an invoice and reflecting in their GSTR 1, then in your books you can take the credit of the GST charged and reduce your sales for the gross amount. So, the entry would be sales account debit, GST input account debit and customer account credit.

CA Parul Saxena

CA Parul Saxena (Querist)

02 September 2019 But why this practice is followed as logically this is incorrect.

Asiya Begum

Asiya Begum (Expert)

02 September 2019 To ease the process. As if a credit note is raised then most of the customers are not reversing the credit accordingly.

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