We are manufacture of pharma machinery. We have cleared machine to customer located in Kolkata in month of June-17 with payment of Excise Duty & Central Sales Tax.
Now, our customer has rejected the machine and he wants to return the same to us.
Please note that customer is registered under GST is a branch of foreign Company. The customer is not able to issue any documents for the returned goods except delivery challon.
How to the settle the transaction under GST.
Pharmaceutical machinery return: Customer must issue tax invoice for rejected machine; manufacturer to record as purchase or credit note. A manufacturer of pharmaceutical machinery shipped a machine to a customer in Kolkata in June 2017, paying Excise Duty and Central Sales Tax. The customer, a branch of a foreign company registered under GST, rejected the machine and wants to return it but can only issue a delivery challan. The response suggests the customer should raise a tax invoice, treating the return as a supply, and the manufacturer should account for it as a purchase or through a credit note. (AI Summary)
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