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.

[KASTURI SETHI]

 In addition to above, invoice issued to the original buyer has to be cancelled and should be reflected in GSTR-1 return.

Full particulars of original invoice should be mentioned in the new invoice.

[Ganeshan Kalyani]

I agree with Sri Kasturi Sir. Once the month is crossed then a way out to show cancelled invoice in GST return is only by way of credit note.

[VENU K]

Your actions are generally in line with GST provisions:

Issuing a credit note for the rejected material is correct. Ensure that the conditions for adjusting your output tax liability are met, especially regarding the reversal of ITC by the original recipient.

Selling the materials to a new buyer in Gujarat is a new supply, requiring a fresh tax invoice.

Generating a new e-way bill for the movement of these goods from Rajasthan to Gujarat is also correct and mandatory if the consignment value exceeds INR 50,000.

It is advisable to ensure all documentation (credit note, new invoice, and e-way bill) is accurately prepared and reflects the actual transaction flow and statutory requirements

[Allauddin Patel]

how can a taxpayer registered in one state sell goods from other state using bill from dispatch from option unless he is registered in that state from where goods are dispatching ?

 

[KASTURI SETHI]

This is w.r.t query at serial no.6.

Here the supply has been originated from the registered premises. Emphasis is laid on the ORIGIN of supply.

[Shilpi Jain]

Registration is required in a State from where supply is made and where a fixed establishment also exists. Just because the goods are being delivered from one State does not mean that the supply is made therefrom. It is rather only the last leg of the transaction!

[Shilpi Jain]

In the transaction under consideration, also ensure that the first customer is communicated appropriately to accept the credit note and the invoice that would be disclosed in the GSTR-1.

AI Summary

Material rejection and resale require a credit note, a new tax invoice, e way bill, and correct GST reporting. Issue a credit note to adjust the original tax liability for the returned goods and treat the subsequent sale as a new taxable supply requiring a new tax invoice and a fresh e way bill; document buyer rejection and credit note acceptance, disclose the original invoice particulars on the new invoice where appropriate, ensure any required reversal of input tax credit by the original recipient, and report the adjustments in GSTR-1 and related returns.