sale return gst

RCM liability is on purchase of good or service from unregistered not on sales or sales return

goods are returned after the period of 6 months from implementation of GST (i.e on or after 01.07.2017) then in such case it will be considered as deemed supply under the GST Act. Since the goods are returned by the person who is not registered in the GST Act  then in such case tax will be payable under the reverse charge as per section 9(4) of the CGST Act by the person who has originally sold the goods and now receiving it back. The credit of tax paid on reverse charge will be available to such person.

When Duty Paid Goods Are Returned By Registered Taxable Person Duty paid goods returned by a registered taxpayer will be treated as ‘Deemed Supply’ and tax has to be paid on this by the person returning the goods. This is because the goods were sold before GST, allowing the buyer to claim input tax credit on the tax paid while discharging output tax liability, or to carry forward the input tax credit under GST. The seller, however, will not have been allowed input tax credits in the old regime. When such goods are returned, GST will be discharged by the person returning the goods. The tax paid will be allowed as input tax credit to the original seller of such goods thus eliminating loss. By Unregistered Taxable Person The seller of such goods will be allowed refund of tax paid at the time of original sale if the following conditions are satisfied: the goods were removed/sold within 6 months prior to the appointed day said goods were returned within 6 months from the appointed day When Exempted Goods Are Returned When goods which are exempt under the current tax regime are returned post implementation of GST by a registered taxpayer, no tax is payable by the person returning the goods if the below mentioned conditions are met: the goods were removed/sold within 6 months prior to the appointed day said goods were returned within 6 months from the appointed day