GST 3B and returns

[Madhavan iyengar]

A Company has sold some products for ₹ 20 lacs and discharged GST on same

Subsequently after 3 months the recipient B sends back certain material of ₹ 2 lacs under GST invoices after charging gst

Company A on return of material took credit of the ₹ 2 lacs returns based on invoice received on return and did not show as sales return in its GSTR-1

Is above treatment correct

[RAHUL GAIKWAD]

No,

a company has to Show in GSTR-1 as a Reg. Credit Note.

[Ganeshan Kalyani]

This is practically done. Issuing credit note by supplier based on the intimation of returning the goods and buyer preparing delivery challenge and eway bill by giving reference to the credit note is tedious. The provision is clear but practical it has procedural difficulties. Thus some parties treat it as supply while returning and raise tax invoice with GST.

But otherwise such transaction has to be routed through credit note because a supplier cannot show as purchaser of his own goods from the customer.

[KASTURI SETHI]

Well explained by Sh.Ganeshan Kalyani Ji. Reply indicates he is beaming with full confidence.

AI Summary

Credit note requirement: supplier must issue and report returns via credit note in GST filings, not treat as fresh supply.
Treatment of returned goods for GST requires the supplier to adjust the original supply through issuance of a credit note and to reflect that adjustment in periodic outward supplies reporting. The supplier must disclose the reduction in taxable value in GSTR-1 rather than treating the return as a fresh inward purchase or separate supply.