Procedure to be obtain on Returned Goods

[SURYAKANT MITHBAVKAR]

We have sales Machine to our customer who is situated in out of states in last two years back. Our customer is not satisfied the machine performance and decided to return the machine to us.

Now, we can not show the same machine as return in our books because there is condition for Out of states sales (Goods should be returned withih Six months period form the date of despatched) therefor our customer is showing sales in their books while raising sales invoice charging excise duty &CST (under Form 'c') .

The above transaction is shows the purchase transaction in our case.

Now, what will be impact if we will take the same machine is input in finance and entered in Form V register in Excise document.

If there is any misinterpretation under the Excise Law.

Please advice.

[KASTURI SETHI]

SH.SURYAKANT MITHBAVKAR JI,

There is no time limit before which duty paid goods can be brought to a factory. So technically goods cleared one year or two years or three years ..or so on..................... can also be brought back and credit taken. Also Read Rule 16(2) of CE Rules, 2002. " For any other purpose" to be noted. It will be helpful to you.

There is no misinterpretation. I am of the view that there will be no adverse impact if you enter in FORM V and account for in books of account.

[KASTURI SETHI]

Pl. refer to my reply dated 10.6.16. I rectify as under :-

Pl. read, "in any other case" in place of "For any other purpose."

[Ganeshan Kalyani]

Under VAT you will loose the credit if sales return is not happened within the prescribed time period. Thanks.

[Ganeshan Kalyani]

Regarding Central Excise my view is in line with Sri Kasturi Sir. Thanks.

AI Summary

Return of duty-paid goods can be admitted and credited under excise, though VAT input credit may be lost if return periods lapse. Seller may accept returned duty-paid goods and account for them in books and in Form V; there is no excise-imposed time limit preventing credit for goods brought back, while VAT input credit may be lost if statutory return periods for credit reversal are exceeded.