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Breakage & Expiry

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Karishma Agarwal

46 Points Posted on 26 September 2020

We Issue A Credit Note For Expired Goods.. I want To Know Should We Charge GST On That Or Not.. And If GST Is Charged Then The Buyer Should Reverse ITC For the same?

Replies (3)

Quick Summary

This discussion clarifies the GST implications when issuing credit notes for expired goods. It explains that if goods are returned within six months of the financial year's end, the buyer must issue a debit note with GST, allowing you to issue a credit note and reduce your output tax liability. However, if goods are returned after this six-month period, you cannot issue a credit note; instead, the buyer must issue a sales invoice with GST for you to claim credit.

Sagar Patel

Tax and Business Consultant

11616 Points Posted on 27 September 2020

#In case Goods return back within 6 month from end of financial year in which such Goods sold :

than Buyer of Goods, when return that Goods to you, buyer have to issue debit note along with GST.(So, he Reverse the ITC taken) And against that Debit note received with returned / expired Goods you have to issue Credit Note and can reduce your output tax liability in respective month.

# In case Goods return back after 6 month from end of financial year in which such Goods sold :

than you can not issue credit note, So in that case buyer have to issue Sales Invoice for that Goods along with GST and you can take credit of same.