Material Rejected by Buyer and same materials sold to another buyer

[Shivanand Jha]

Material rejected by Buyer of Rajasthan  and we have issued a credit note to same. Further we have sold this same materials to another buyer to Gujrat and issue a new invoice with E waybill from Rajasthan to Gujrat.Is it ok ? please advice. 

[NYAYASETU LEGAL ASSOCIATES LLP]

Yes, This is completely ok if you have followed these steps:

1. Raise Credit note without EWB for material return.

2. Issue fresh invoice by specifically mention dispatch from details of earlier buyer (Rajasthan) and on the basis of which New EWB has been generated.

Suggest to maintain proper documentation regarding material rejection by buyer (like mail or commercial DN etc)

 

[Ganeshan Kalyani]

Sir, there is provision in e-way bill to mention "Dispatch From" location. Here, you can mention the address of your first customer. Since, dispatch from address is not there on Invoice you must carry the e-way bill copy.

AI Summary

Goods and Services Tax treatment for rejected goods resold to a new buyer: credit note, fresh invoice with EWB required. Under GST, when goods are rejected by one buyer and resold to another, the supplier should issue a credit note for the return (without creating an e-way bill) and then raise a fresh tax invoice for the new supply, generating a new e-way bill showing dispatch from the earlier consignee location. Maintain documentary evidence of rejection and return (e.g., emails, delivery notes). Following these steps treats the return and subsequent interstate sale as separate taxable transactions and aligns with e-way bill and invoicing compliance requirements.