Import of Goods under GST - Accounting

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This discussion addresses the GST accounting treatment for imported goods when a post-import discount is received. It clarifies that the full original invoice value should be accounted for as expense, and no ITC reversal is necessary as IGST was paid on the initial import value. The advice also covers booking purchase expenses based on the Bill of Entry (BOE) date and exchange rate, and accounting for the credit note at the credit note's exchange rate.

Pragati Sharma

Pragati Sharma (Querist)

14 December 2020 A GST Reg. taxpayer imported goods worth $15000 from China. He cleared the goods from the customs. Now the client receives Discount of $5000 against the invoice.

1. Whether the assessee should account for only the net $10000 as exp.?
2. The assessee took ITC of IGST paid at the time of import. Whether he have to reverse any ITC because of this discount on imports?
3. Whether any communication have to be made to customs or any other Govt department or RBI regarding discount received from China?

Lekhraj sood

Lekhraj sood (Expert)

14 December 2020 You have to book full purchase $15000 as per BOE and Invoice.
No ITC reversal required.
You have to present supplier credit note of $5000 discount to bank along with invoice and BOE while making payment.

Pragati Sharma

Pragati Sharma (Querist)

15 December 2020 Thank you, sir, for your response. I have another related query also

1. We will book the purchase exp in the accounts on the date of BOE and as per the exchange rate mentioned in BOE?

2. Sir we have to account for the credit note in the books of accounts? What shall be the rate of conversion for Credit Note whether as per credit note date or as on the date of original invoice?

Pragati Sharma

Pragati Sharma (Querist)

15 December 2020 Can the GST department disallow the ITC taken of import of goods as per BOE because later on discount was given by the supplier to us?

Spurto Consultancy Services

Spurto Consultancy Services (Expert)

15 December 2020 Book credit note received from supplier in books as per current exchange rate

Lekhraj sood

Lekhraj sood (Expert)

15 December 2020 No,In my opinion the department cannot ask for ITC reversal because you have paid full igst while importing.

Pragati Sharma

Pragati Sharma (Querist)

15 December 2020 Thank you, sir, for your response.
I have another related query also

1. We will book the purchase exp in the accounts on the date of BOE and as per the exchange rate mentioned in BOE?

2. Sir we have to account for the credit note in the books of accounts? What shall be the rate of conversion for Credit Note whether as per credit note date or as on the date of original invoice?

Lekhraj sood

Lekhraj sood (Expert)

16 December 2020 As per the date of accounting of/of credit note.

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