INPUTS RETURN

[TAX solution]

Dear Experts

We have purchased some inputs goods and same has been rejected by our quality control department. Now, we want to send back to vendor.

My queries are

1. How to send goods to vendor? Whether through Tax Invoice or Challan or Debit note.
2. Whether we have to reverse ITC or credit /increase to tax liability?
3. When purchased return to vendor , purchase return in which GSTR return should be reported by us, whether GSTR- 1 or GSTR-2 .
4. Who will sign the tax invoice? Any intimation is required to tax authority, if any employee is authorized for sign to tax invoices?

Please provide related sections /Rules

Thanks in advance

[KASTURI SETHI]

Dear Querist,. . 1. The supplier will issue credit note. 2.Liability will be increased. 3. GSTR-1. GSTR 2 is still not sure. Govt may plan one return only.Matter under consideration. 4. Entry in the Common Portal system is itself intimation to the Department. These are my views. Other experts may intervene pl.

[SHIVKUMAR SHARMA]

1. Goods Return through Credit Note.Credit Note will be Issued By your Supplier infavour of You.

2.Your supplier will reduced their liability.

3.your Supplier is shown the Transaction (Credit Note) in GSTR-1

4.Credit note will be signed by Authorized signatory of your Supplier of goods.

You are nothing to do .You return the rejected goods on the basis of Credit note Issued by your Vendor.

[KASTURI SETHI]

Thanks a lot, Sh.Shivkumar Shama Ji.

[Alkesh Jani]

Sir,

For sake of clarity and supporting the views expressed by our experts, the Q.No.33 of FAQ is reproduced below:-

“Q 33. Is there any provision in GST for tax treatment ofgoods returned by the recipient?

Ans. Yes, Section 34 deals with such situations. Where thegoods supplied are returned by the recipient, theregistered person (supplier of goods) may issue to therecipient a credit note containing the prescribedparticulars. The details of the credit note shall bedeclared by the supplier in the returns for the monthduring which such credit note was issued but not laterthan September following the end of the year in whichsuch supply was made or the date of filing of the relevantannual return, whichever is earlier. The details of thecredit note shall be matched with the correspondingreduction in claim for input tax credit by the recipient inhis valid return for the same tax period or anysubsequent tax period and the claim for reduction inoutput tax liability by the supplier that matches with thecorresponding reduction in claim for ITC by the recipientshall be finally accepted and communicated to bothparties”.

Thanks

[KASTURI SETHI]

Sh.Alkesh Jani Ji,. Thanks for enrichment so quickly.

[TAX solution]

Dear Sir,

Please provide FAQ date & URL LINK also if available .

[Alkesh Jani]

Sir, Please find the following links for FAQs.

http://www.cbic.gov.in/resources//htdocs-cbec/gst/faq-gst 2018.pdf;jsessionid=C44FBDC7846A7C5037913ABC09D907C6

Thanks

[YAGAY andSUN]

Tax Invoice would be signed by Authorized Signatory whose information is incorporated in the GSTN. Non Compliance will attract penal action.

AI Summary

Credit note issuance for returned goods requires supplier reporting and matching to reverse input tax credit across returns. When rejected goods are returned the supplier issues a credit note and declares it in returns for the month of issue (or by the September following year-end or annual return filing date). The supplier's output liability is reduced and the recipient must reduce or reverse the corresponding input tax credit; these adjustments are matched through the return reconciliation process. The supplier reports the credit note in GSTR 1, the credit note/tax invoice must be signed by the authorized signatory recorded in the GST system, and entry on the common portal functions as intimation to authorities.