Circular to clarify the procedure in respect of return of time expired drugs or medicines.

Return of time expired goods: supplier options to treat as fresh supply or issue credit note with corresponding ITC consequences.

Procedural options for return of time expired goods: treat the return as a fresh supply by issuing an invoice and allowing the recipient to claim Input Tax Credit subject to Section 16 conditions; composition taxpayers must issue a bill of supply with no ITC to the recipient; unregistered persons may return goods via a commercial document without tax. Alternatively, the supplier may issue a credit note; if issued within the statutory adjustment period the supplier may adjust tax liability provided the recipient has not availed or has reversed ITC, whereas credit notes issued after that period do not permit adjustment nor require portal upload. Destruction of returned goods requires reversal of the ITC as specified.