what is the accounting treatment for defectives product received by firm ???
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Quick Summary
This discussion explores the accounting treatment for defective products received by a firm. It covers returning goods to the supplier using a debit note and the subsequent credit note issued by the supplier. The impact on GST, including input tax credit (ITC) reversal and reporting in GSTR1 and GSTR3B, is also addressed. Finally, it touches upon scenarios where the firm retains defective products.
Return them back to the supplier ,and prepare Debit Note against original purchase Invoice and pass entry in their books of accounts in your Firm .
Trader Creditors A/c Dr To Purchase return A/c Cr To CGST. A/c Cr To SGST. A/c Cr ( Defective products return to Supplier )
However as per section 34 of the CGST act , under GST law supplier can only issue Credit Note to you against original Invoice and show in GSTR1 . you have to do agestment in GSTR3B
Return back the good to supplier along with debit note. Supplier will issue u a credit note and they will show that in their GSTR 1. After that u r required to reverse the ITC taken based on CN uploaded by supplies and reflected in GSTr 2B