Debit note for inferior quality

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Rahul Jain

Accountant

131 Points Posted on 28 May 2014

Suppose a Excise Dealer "A" puchases certain goods from a Manufacturer "B".

Value of Goods Rs.30000

Excise Duty & Cesses Rs.3708

VAT @ 5% Rs.1685

Total Rs.35393

This dealer sells this goods to his customer "C" under Excise Invoice.

C on receiving the goods complaints to A that it is of Inferior quality and he will deduct Rs. 1500 from total billed amount and pay rest amount.

For this C has to issue Debit Note of Rs. 1500 to A and A in-turn has to issue Debit Note of Rs. 1500 to B while complaining for inferior goods.

How will A the excise dealer make entry for debit note and credit note in his books of accounts?

Replies (2)

Harendra Kumar

Tax Advisor

1502 Points Posted on 30 May 2014

Sir,

In this matter you make the payment of such material and same condition for issuance debit note in this regard.

U S Sharma

glidor@gmail.com

21670 Points Posted on 31 May 2014

i think the dealer has added some profit margin also on the part of trading,

its wise to adjust he same from that margin, as issue of debit note to manufacturer will make the issue complicated.

to get more illustrated reply, please mention that A is depot of B or not| if A is independent trader then it would take legal complication with excise department, regarding valueation ,as A has accepted the invoice value, and on ground of C/D it can not be changed.