GST - DEBIT NOTE FOR REJECTION MATERIALS

[SAFETAB LIFESCIENCE]

Dear Experts,

We need on clarification. When we sending Raw Materials rejection materials (partly or fully) to the Original Suppliers, what documents should we send alongwith the consignment. Hope we have to send Debit Note with GST. If we raise our Debit Note, shall we have to raise only through E-Invoice.

If we raise Debit Note via Einvoice mode, it will be automatically reported in GSTR-1, Is it? But we should adjust/reverse the duty in our GSTR-3B as Purchase Return and we should not report that DN in GSTR-1 and increase the liability as like as outward supply. For our Purchase Return if we raise DN under Einvoice mode and if it is auto poulated / reported in GSTR-1, shall we remove that entry in GSTR-1 manually and file GSTR-1 ? and shall we adjust/reverse the same in our GSTR-3B.

AI Summary

Debit note and delivery challan use for returns clarifies supplier issuance of credit note and ITC reversal obligations.
For rejected raw materials returned to suppliers, two methods are used: (a) treat as sales return with a counter tax invoice (complying with e invoice and E way bill requirements where applicable); or (b) send goods with a delivery challan and E way bill and issue a debit note (no recipient e invoice required), after which the supplier issues a credit note and reverses input tax credit. Debit/credit notes are primarily supplier instruments; contracts should address returns to avoid forced ITC reversals, interest and penalties when suppliers do not issue credit notes.