Rejection Return of GST paid goods from Govt. agency or PSUs, Goods and Services Tax - GST

[MohanLal tiwari]

Dear Experts,

We are supplying goods to various Govt agencies like Railways & defense, PSUs and private sector industries on payment of GST. If any materials gets rejected and needs to be rectified / replaced, we have to get back the materials but the Govt. Agencies and PSUs are not issuing GST Invoice for return of goods on the ground that they have not accepted & accounted for the goods (GRN not issued) and not taken any ITC credit of GST.

Kindly advise how to get back the rejected GST paid goods and replace without paying GST twice. Can we issue Credit Note against our invoice and take back the credit of GST paid and issue fresh GST Invoice while replacing the goods. In any case, customer will have nothing to do with GST portal till GSTR-2 is not operative.

Posts / Replies

[Ganeshan Kalyani]

You can get the material back based on credit note.

[MARIAPPAN GOVINDARAJAN]

Your view is correct but due to non operative of GST you have to wait till that time.

[KASTURI SETHI]

Yes. Provision to this effect in Common Portal is still awaited as efforts for improvement in the software of GST is in progress.

[Ganeshan Kalyani]

You can supply fresh material under Tax Invoice.

[Ramaswamy S]

Suggest you to follow the following steps:

1. The customer has informed that they have not accounted and not taken ITC.

2. Ask them to send (return) the goods on a Delivery Challan (returning the goods is not a supply)

3. Issue Credit Note to reduce your tax liability and your accounting.

4. After receipt of the material and issuance of credit note, supply the replacement on a new Invoice.

Regards

S.Ramaswamy

[MohanLal tiwari]

Mr Ramaswamy

Thanks for valued suggestion. I am also in same opinion but the issue is, we have already paid GST against supply of goods in July'17 and submitted GSTR-3B. If we issue Credit Note today, how the GST amount will be credited in our account / GST Credit Ledger.

[Ramaswamy S]

Issue the credit note in the current month and it reduces the current month liability. GST Portal allows the same. Portal asks for the details of the invoice for which the credit note is issued.

Regards

S.Ramaswamy

[Ganeshan Kalyani]

Yes the portal allows to upload credit note details which will reduce your tax outflow .

[MohanLal tiwari]

Dear Sir/s,

Thanks. But one thing, we have to keep in mind that customer being Indian Railway / PSUs, may neither approve the Invoice nor credit note uploaded on portal. In such a scenario, will it be advisable to adjust liability with Credit Note.

Best Regards

M L Tiwari

[Ganeshan Kalyani]

To my knowledge credit note is to be uploaded at your end. Say , you had uploaded sales detail of ₹ 100/- and then you upload credit note of ₹ 20/- then the recipient will get these inovices as his inward invoices of ₹ 80/-. This will match with his books as he has accounted only for the net purchase.

I welcome views of my collegue experts.

[MohanLal tiwari]

Dear Kalyany Sir,

As already explained, the customer i.e Indian railway / PSU has not issued Goods Receipt & Acceptance Note as they have not accepted the entire supply and accordingly not accounted for in their stores as well as books of accounts.