whether cst to be charged on purchase returns

[Ramakrishnan Seshadri]

Dear Sir,

We are purchase raw materials/components on inter state purchases by issuing c form. out of the purchases made some parts has been rejected and they has to be returned. We have to raise invoice for this purchase rejectionby charging excise duty. We would like to know whether we have to charge cst or not in the invoice. if not what is the procedure.if cst is to be charged then  it will be treated as sales and we have to claim c form from them .

Kindly guide us how proceed in this issue.

Thanks & Regards,

S.Ramakrishnan.

[Arup Das]

Dear Mr. S. Ramakrishnan

For purchase returns no CST to be charged, as sales tax is levied only on sales and purchase returns will not be considered as sales.

Secondly you are saying that on the purchase rejection you are charging excise duty, i believe you mean it is a reversal of credit and you are raising an "input removed as such invoice" and not an invoice under Rule 11 of Central Excise Rules.

Regards

Arupp Das

[Ramakrishnan Seshadri]

Dear Sir,

Thanks for your reply. But as you said sales tax is to be levied on sales. Then how will you send back the rejected materials which may be quality defect or not upto the standard  to other state.

Suppose if the purchase materials is an excisable item what is the procedure.

Kindly clarify.

Thanks & Regards,

S.Ramakrishnan.

[Arup Das]

HI Ramakrishnan

If the purchases is a excisable material , there might be 2 scenarios

1. Credit Availed :- In that case , you can raise an Input removed as such invoice, reverse the credit and remove the material giving reference to the original vendor invoice.

2. Credit Not Availed :- You can send the material with a Delivery challan enclosing the original vendor invoice.

Regards

Arupp Das

[Ramakrishnan Seshadri]

Dear Sir,

Thanks for your immediate reply. Along with delivery challan whether form JJ has to be prepared.since the materials are moving out from tamilnadu to other state.

Regards,

S.Ramakrishnan.

AI Summary

CST on purchase returns: not leviable; follow excise procedures for credit reversal or delivery challan. CST is not leviable on purchase returns because returns are not sales. For excisable goods, if input credit was availed reverse the credit and issue an 'input removed as such' invoice referencing the original vendor invoice; if credit was not availed, send the goods under a delivery challan with the original vendor invoice. The need for Form JJ on interstate returns was queried but not answered.