Debit note to Foreign supplier by Importer

[GST CMS]

What would be GST Implication if Importer raise Debit note to Foreign supplier on account of defective material supplied by him?

AI Summary

Importer Questions GST on Debit Note for Defective Goods; Experts Clarify Under Section 34 CGST Act An importer queried about the GST implications of issuing a debit note to a foreign supplier for defective materials. Experts in the forum agreed that GST is not applicable since the debit note serves as compensation for duty-paid goods, not income. Under Section 34 of the CGST Act, only suppliers can issue credit or debit notes, and the foreign supplier is in a non-taxable territory. It was advised to submit the debit note to the bank for reduced foreign payments. Concerns were raised about under-declaring the value of replacement items to customs, suggesting proper declaration is necessary.