Damaged goods

[Bharath Kumar]

Goods are damaged/expired while receiving by the recipient dealer. Goods are not returned to the supplier but the supplier issues non inventory credit memo at certain percentage as damage compensation purpose.

In this situation what will be the GST impact in all modes ?

AI Summary

Input tax credit reversal required when damaged goods prompt supplier credit notes and recipient debit adjustments.
When goods are damaged or expired and not returned, the supplier should issue a credit note reducing its taxable supply and the recipient may record a corresponding debit note; upon the supplier uploading the credit note the recipient must reverse any input tax credit previously availed to reflect the reduced consideration, and the supplier's GST liability will be adjusted accordingly.