Purchase Rejection procedure in GST

[Yatin Bhopi]

Sometimes we received defective goods which need to be return to seller. For rejecting goods, under Section 34 of CGST ACT 2017, supplier of goods should issue credit note and he should declare this credit note in GSTR-1. Once seller uploads credit note, GST amount will be reflected in our GSTR-2 it will be reduce our available ITC.

Is that mean for every purchase rejection we need to First avail the Input tax credit (whether full or part rejection) so that when seller issue credit note it will be nullify.

Please let me know

AI Summary

Input tax credit reversal aligns with supplier credit notes for returned defective goods, affecting recipient ITC availability and accounting.
Where defective goods are returned, the supplier should issue a credit note reported in his outward supplies return, which will reflect in the recipient's inward records and reduce available input tax credit; if the recipient has already availed ITC, the recipient must reverse that credit to permit the supplier's reduction in output tax. Returns are commonly effected on a Delivery Challan with an e way bill, with alternatives like recipient tax invoices or short booking discussed as procedural variations.