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Debit note to Foreign supplier by Importer, Goods and Services Tax - GST

Issue Id: - 116801
Dated: 17-10-2020
By:- Hiren Pathak
Debit note to Foreign supplier by Importer

  • Contents

What would be GST Implication if Importer raise Debit note to Foreign supplier on account of defective material supplied by him?

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Posts / Replies

Showing Replies 1 to 7 of 7 Records

1 Dated: 17-10-2020
By:- KASTURI SETHI

The amount recovered through debit note from 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.


2 Dated: 18-10-2020
By:- Alkesh Jani

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 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.


3 Dated: 18-10-2020
By:- YAGAY andSUN

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.


4 Dated: 18-10-2020
By:- KASTURI SETHI

Yes. Very important point advised by M/s.Yagay and Sun, Sirs.


5 Dated: 19-10-2020
By:- JAYANTA BANDYOPADHYAY

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 rejction to Customs-also not returning the defect item abroad- as it is almost scrap

Please guide

Rgds

Jayanta Bandyopadhyay

19/10/2020


6 Dated: 19-10-2020
By:- Ganeshan Kalyani

I agree with the views of the experts.


7 Dated: 19-10-2020
By:- YAGAY andSUN

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 to exchequer.


1

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