Guidance Required on Returning Defective Equipment Purchased Without ITC Claim
This query is : Resolved
02 September 2025
We are a hospital providing healthcare services, which are exempt from GST. On 31-01-2024, we purchased medical equipment worth ₹80,00,000/-. Since our services are exempt, we did not claim ITC on this purchase.
Unfortunately, the machine has turned out to be defective, and we are returning it to the supplier. The issue we are facing is:
The supplier says they cannot raise a credit note.
We also cannot raise a sales invoice for returning the equipment, as that would attract GST liability, which we would have to bear from our own funds.
Our intention is only to return the defective machine and obtain a full reimbursement, since the defect is on the supplier’s side.
Could you please advise the correct legal and GST-compliant procedure for returning the equipment and obtaining full reimbursement without incurring GST liability?
Unfortunately, the machine has turned out to be defective, and we are returning it to the supplier. The issue we are facing is:
The supplier says they cannot raise a credit note.
We also cannot raise a sales invoice for returning the equipment, as that would attract GST liability, which we would have to bear from our own funds.
Our intention is only to return the defective machine and obtain a full reimbursement, since the defect is on the supplier’s side.
Could you please advise the correct legal and GST-compliant procedure for returning the equipment and obtaining full reimbursement without incurring GST liability?
03 September 2025
Return the equipment using a delivery challan (not a sales invoice), clearly stating the reason for
return (“defective equipment – return to supplier”).
Request the supplier to process the return and refund based on the delivery challan and the
original purchase documentation.
Supplier can treat the return as a cancellation of the original outward supply (since no ITC was
claimed and the buyer is not registered/exempt) and directly refund the invoice value
return (“defective equipment – return to supplier”).
Request the supplier to process the return and refund based on the delivery challan and the
original purchase documentation.
Supplier can treat the return as a cancellation of the original outward supply (since no ITC was
claimed and the buyer is not registered/exempt) and directly refund the invoice value
04 September 2025
How do the supplier get back the GST which he paid earlier while raising the sale invoice?
04 September 2025
It gets reversed when the invoice gets cancelled...
20 September 2025
Good Luck..
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