Rejection of material

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 March 2014 Material returned back to a manufacturing company from its customer for quality issues. Whether it (sales rerurn) should be recorded in RG 23A - Part I too. or only material purchased will be recorded in RG 23A-Part I??

Arun Kumar Singh

Arun Kumar Singh (Expert)
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19 March 2014 You will received the rejected material as a input.

Querist : Anonymous

Querist : Anonymous (Querist)

19 March 2014 Whether it should be recorded in RG23A part I

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2025 Yes, rejected material returned by the customer should be recorded in RG 23A Part I if you are treating it as input for further processing or rework.

🔍 Here's a breakdown:
✅ What is RG 23A Part I?
RG 23A Part I is a register under the CENVAT Credit Rules (applicable under earlier Central Excise regime, now subsumed under GST), where details of receipt and consumption of raw materials (inputs) are recorded quantitatively.

📌 When to record in RG 23A Part I:
If the rejected goods:

Are received back into the factory, and
Will be used again as input or reworked/reprocessed,
👉 Then yes, they should be entered in RG 23A Part I.
It should be treated as if you're receiving input material.

❌ When not to record in RG 23A Part I:
If the goods:

Are not being reused, or
Are being scrapped, destroyed, or disposed of without use,
👉 Then it should not be recorded in RG 23A Part I.
🔄 Also Consider RG 23A Part II (if applicable):
If any duty credit was reversed or impacted at the time of sales return, appropriate entries might also be required in RG 23A Part II (which records CENVAT credit on inputs).

📝 Best Practice:
Record the return as Input Received under Rejection in RG 23A Part I with proper remarks.
Keep challan copies, return memos, and internal quality inspection records to justify the return and reuse.

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