LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Gst on sale of goods on reduced prices and compensation of loss from supplier

uma sharma (student) (103 Points)

15 April 2023

Sir , i have one doubt , if i have purchased goods (chips) of rs 100 plus 12 gst , then if this goods gets damaged( packets outgassed) i sale it for 40 rs plus gst 4.8 corresponding i get 60 rs from supplier as a compensation for goods damaged . Do i need to pay/ reversr credit on that gst component of rs 60

Reply
Follow
Share

3 Replies

SANGAMESWARAN.N (Senior accountant) (116 Points)
Replied 17 April 2023

Yes you have to pay gst on reduced sale price and ( compensation received (ie.including gst))

SANGAMESWARAN.N (Senior accountant) (116 Points)
Replied 17 April 2023

Yes you have to pay gst on reduced sale price and ( compensation received (ie.including gst))

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 18 April 2023

As if the credit note has been issued where the goods found to be defective it must be included to determine value of supply. So ITC must reversed .

Note :
when Credit Note is issued as Secondary Discount as such Discount are given after the supply done. As in your case if your supplier re-value the the goods(chips) Rs40/- & pass on the credit note for Rs 60/- in that case in term of Section 15(3)(b) states that if Discount given after supply But it was not agreed upon before/at time of supply then Financial credit note can be issue. So that case no GST reversal needed.

In your case if supplier has issued the credit note by revrsing his Output Tax liability then you are surely required to reverse your ITC