TMI BlogReceipt of replacement Material under WarrentyX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts, We are a registered Manufacturers in Karnataka, In July 2018, We Purchase a Machinery spares by paying IGST, after installation of that spares, it is get damaged within10 days, but actual warranty for that material is 1 year. We intimated the supplier and he agreed to give replacement, and he told us to scrap that material since it is Un Repairable/Exposed . Now he is supplying N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew Material with Another Tax invoice with IGST and giving Credit Note only for the Basic Amount for the rejected material. My Query is: a) Is this Procedure is correct ? b) Is it require to reverse IGST Credit availed from us for the rejected material ? but supplier issuing Credit note only for Basic Amt. Kindly explain in detail about the procedure to be followed in these type of issues., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thanks in advance. Regards, Manjunath S - Reply By Ramaswamy S - The Reply = The supplier to give credit note including the GST amount. The tax payable by the supplier is reduced to the extent of the credit note. The recipient not to avail the ITC on the first invoice. The supplier to supply the replacement on a new invoice with GST. The Input Tax Credit shall be based on the second invoice i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. replacement invoice. Regards S.Ramaswamy - Reply By Rajagopalan Ranganathan - The Reply = Sir, According to Section 34 (2) of CGST Act, 2017 any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed: Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other person . Therefore in your case since Machinery spares were supplied by paying IGST the incidence of IGST had already been passed on to you and you could have availed ITC of the same. Therefore your supplier has correctly issued crredit note for the base price of the spares. However when you sell the damaged spares you have to discharge gst on the transaction value. For discharging th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e gst on the scrap you can utilise the ITC already availed. - Reply By DR.MARIAPPAN GOVINDARAJAN - The Reply = In my view the procedure adopted by the supplier is correct. - Reply By Ganeshan Kalyani - The Reply = There is revenue neutral. The supplier is to charge GST on the credit note to take benefit from his side. But the recipient has to reverse the credit. Now by passing credit not for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basic amount the recipient need not have to reverse the credit. And the supplier also tend to have paid full tax. Thanks. - Reply By subramanian vijayakumar - The Reply = I agree with the views of the expert Rajagobalan renganathan Sir - Receipt of replacement Material under Warrenty - Query Started By: - Manjunath S Dated:- 25-8-2018 Goods and Services Tax - GST - Got 5 Replies - GST - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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