TaxTMI 
TaxTMI 
Debit note to Foreign supplier by Importer
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....ebit note to Foreign supplier by Importer<br> Query (Issue) Started By: - Hiren Pathak Dated:- 17-10-2020 Last Reply Date:- 19-10-2020 Goods and Services Tax - GST<br>Got 7 Replies<br>GST<br>What would be GST Implication if Importer raise Debit note to Foreign supplier on account of defective material supplied by him? Reply By KASTURI SETHI: The Reply: The amount recovered through debit note fro....
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....m foreign supplier on account of defective material supplied by him (foreign supplier) is compensation against duty-paid goods. Such compensation is not income (consideration) . In my view, GST is not applicable. Reply By Alkesh Jani: The Reply: Sh. In agreement with the views expressed by Shri Kasturiji Sir, It may be noted that In terms of Section 34 of CGST Act, 2017, only supplier of goods....
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.... or services can issue Credit Note/Debit Note. In the instant case, GST Act is not applicable to foreign supplier being a non-taxable territory. Reply By YAGAY andSUN: The Reply: The copy of Debit Note along with relevant documents need to be submitted to AD (i.e. your banker) for making reduced foreign payments against such imports. Reply By KASTURI SETHI: The Reply: Yes. Very important point....
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.... advised by M/s.Yagay and Sun, Sirs. Reply By JAYANTA BANDYOPADHYAY: The Reply: Instead of using Credit Note, foreign supplier is replacing the defect item with Free of Cost item with a minimum value ( no rational basis) for customs purpose. Is it correct , as there is a suppression of real transaction value -therefore, less customs duty is payable. Additionally, we did not declare about our rej....
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....ction to Customs-also not returning the defect item abroad- as it is almost scrap Please guide Rgds Jayanta Bandyopadhyay 19/10/2020 Reply By Ganeshan Kalyani: The Reply: I agree with the views of the experts. Reply By YAGAY andSUN: The Reply: In our view, the value of the replaced item needs to be declared correctly to the Customs Department for calculation of Customs Duty and paying it t....
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....o exchequer.<br> Discussion Forum - Knowledge Sharing ....