Rejected Goods by Customers

[SURYAKANT MITHBAVKAR]

We had supplied goods in June-17 charging excise duty & CST .

Now customer want to return the same as rejected and to be cleared under delivery challon.

While raising credit note to customer we have to charge them only basic value of the Goods .

Since Excise duty and Central Sales Tax already paid to the government we cannot reverse the same through credit note.

Is there any provision can customer get refund of the excise duty (Not claim input tax credit by customer) and Central Sales Tax.

[MUKUND THAKKAR]

No refund provision in excise as well GST, please check with your customer, I think he was taken credit thru TRN-1. if stock and documents are available with him.

[KASTURI SETHI]

I have already thoroughly analysed such situation. There are so many 'buts' and 'if's for getting refund claim. Whether your client has claimed ITC in TRANS-1 or not, refund is NOT possible practically. Legally as well as practically Govt. does not intend to sanction refund claim except export situation. Sh.Mukund Thakkar, Sir has rightly advised. The reason behind this is obvious. No need to explain

No use of wasting time and energy.

[DR.MARIAPPAN GOVINDARAJAN]

Thanks for the reply of the experts for the new knowledge for me.

AI Summary

Refund of indirect taxes on returned goods is largely unavailable; credit notes typically adjust only the basic value. Where goods returned as rejected were originally invoiced with excise duty and Central Sales Tax paid, there is no straightforward statutory or practical refund mechanism for excise or CST in domestic return situations; contributors note refunds are rarely sanctioned outside export cases, and practical recovery depends on whether the buyer claimed transitional ITC via TRANS 1 and possesses requisite stock and documents, so suppliers typically limit credit notes to basic value adjustments while excise and CST remain with the government.