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

[Asked by Guest]

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

Credit note issuance for returned goods ensures supplier adjusts output tax and purchaser reverses ITC where applicable.
Rejection or return of goods permits the supplier to issue a credit note, reduce output tax in GSTR-1, and require the purchaser to reverse the corresponding input tax credit so the reduction is reflected in GSTR-2A; documentary steps such as intimation, delivery challan for return and purchaser acceptance are necessary. A tax circular permits using the original invoice value as the value of the return supply subject to ITC conditions and allows the purchaser to alternatively account for the return by issuing an invoice, while return formats provide classification fields that may cause purchasers to record returned stock as sales.