Issue of Tax Invoice Against Material Rejection by Customer instead of Debit Note

[ACCOUNTS MANAGER]

Hiii...

Few of our customer (OEM) has issued Tax Invoice against material rejection and also shown in their GSTR-1 as sales. And we issued Credit Note for the same and shown in GSTR-1 which is required as per GST.

Question is that they issued Tax Invoice as per GST Rules which is ok but how can they show in GSTR-1 as new sales???... Because same is reflected in our GSTR-2A which is wrong because it is not our purchase.

I want to understand treatment of Customer as why they show this transaction as Sales and not Debit Note??

And if during Audit GST officer raise question of not treating as purchase then how we have to reply??

Kindly Reply,

From,

Devendra

AI Summary

Accounts Manager Queries Incorrect Tax Invoice Entry; Corrective Steps Validated Under Section 34(1) of GST Act An accounts manager raised a query about a customer issuing a tax invoice for rejected materials and reporting it as sales in their GSTR-1, which incorrectly reflects as a purchase in the manager's GSTR-2A. The manager issued a credit note per GST rules. Two responses clarified that the procedure was correct under Section 34(1) of the GST Act, suggesting that the customer should have accepted the credit note and reversed the input tax credit (ITC). The discussion also referenced a circular allowing for alternative methods of handling such transactions, emphasizing proper documentation and compliance.