Hi,
I have 2 scenarios for which I would want a solution:
Secanrio 1:
Material sent by the supplier have quality issues and the same is being rejected at the customer end without any movement of goods.
Payment to the supplier should be deducted for the same. So, in this instance whether supplier needs to provide a credit note or customer can provide a debit note? Should GST be added?
Scenario 2:
What should be done for scenario 1, but for a foreign supplier?
Regards,
Pavan
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Process of debiting the supplier on quality issues
Replies (6)
Scenario 1) Supplier will issue credit note, and yes GST should be added in the credit note.
Scenario 2) Same treatment.
Thank you for the response. Supplier is not agreeing to issue the CN, stating there is no movement of goods. Could you share any GST link supporting this, so that it will be easy to convince the vendor.
Make reference of section 34(1) of CGST Act which is as follows-
34. (1) Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit note containing such particulars as may be prescribed.
thanks a lot. I will share this to vendor and let you know the outcome.
Yes please let me know their view!
The rejection cost includes part cost and manpower cost incurred for converting non qualitative part into a quality part. Supplier has agreed for issuance of credit notes for part rejection from his end and requested us to issue an invoice for the mapower cost incurred. thank you.
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