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Return of material
What will be the procedure of Material return under GST for the supplier ?. Case one::Where partial consignment got returned by the Buyer. Case two: Where full consignment got returned by the Buyer.
Replies (5)
In both case booked the invoice and issue debit note
Sir what does it mean by booking of invoice ?
When you send the materials, you raise the invoice, he must accept the invoice and credit to you, then, issue debit note for material return, you must raise credit note. Whatever full return or partial return.
as a supplier you have to reduce your output liability by way of issuing credit note under section 34. physical return of material from recipient premises can be done by bills of supply or delivery challan etc.also see sec.43&44 for further course of action.
Following procedure to be adopted in this case:
- Original supplier has to issue a credit note to the recipient of rejected goods for the value and tax.
- Before this there must be an agreement between supplier and recipient for the rejection at recipient's end and acceptance of such rejection at supplier's end. This can be documented through rejection advice note and acceptance.
- Immediately after receipt of credit note recipient need to reverse ITC taken on such rejection.
- After this supplier will reduce his output tax liability in his current or subsequent return as the case may be.
- Physical movement of return has to take place under a Delivery challan as per Rule 55 of GST Rules.
- Delivery Challan for return should contain all the details of tax invoice except tax amounts as there is no supply with consideration.
- Cross reference of Credit Note and ITC reversal should be mentioned in the Delivery Challan.
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