GOODS RETURNED BY COMPOSITE DEALER TO REGISTERED DEALER

[ROHIT GOEL]

REGISTERED DEALERS SOLD GOODS WORTH RS. 10,000/- TO COMPOSITE DEALER AND GST OF 5% CHARGED RS. 500/- TOTAL VALUE RS. 10,500/-

COMPOSITE DEALER OUT OF ABOVE INVOICE RETURNED GOODS WORTH RS. 4000/- TO REGISTERED DEALER THROUGH DEBIT NOTE. REGISTERED DEALERS ISSUES A CREDIT NOTE FOR THE SAME.

CAN COMPOSITE DEALER REFLECTS GST IN DEBIT NOTE.

[Ganeshan Kalyani]

Composite dealer cannot raise tax invoice. In my view they cannot raise debit note indicating tax component.

[KASTURI SETHI]

I think Querist is talking about composition and not composite. So reply posted by Sh.Ganeshan Kalyani , an expert is correct.

[Himansu Sekhar]

The supplier will issue credit note. The same will be uploaded. We have to see how gstn behaves when there is no scope for composition dealer to reverse the credit to complete the actions under sec. 34. Please make a tweet at gst@goi. We also want to know the result.

[Ganeshan Kalyani]

In my view, the sales to composite dealer should be shown in b2c sheet. So that sales return can also be shown in the same sheet and credit on sales return can be availed.

[RAMESH PRAJAPATI]

Under GST, Selling dealer is required to issue credit note and debit note (as applicable). So selling dealer will issue credit note and upload information on portal. Since composite dealer cannot avail ITC, liability of GST will also be reduced accordingly.

[DR.MARIAPPAN GOVINDARAJAN]

In my view he can reflect in debit note.

[Ganeshan Kalyani]

It need to be seen further that in view of matching concept how the credit will be allowed on sale return received from an composite dealer.

Now that the government has extended GSTR 3B filing till December 2017, the GSTN may be developed / improved further considering various factor, one being matching concept.

AI Summary

Composition dealer invoice restrictions: supplier to issue credit note on returned goods; GST liability adjusts and no ITC claim.
When a registered dealer's supply to a composition-scheme dealer is partly returned, the registered supplier should issue the credit note and upload it to reduce GST liability; composition dealers are not authorised to issue tax invoices or debit notes with tax components and cannot claim input tax credit, and reporting in B2C and portal matching routines may affect electronic adjustment.