TMI BlogCircular to clarify the procedure in respect of return of time expired drugs or medicines - Reg.X X X X Extracts X X X X X X X X Extracts X X X X ..... rious representations have been received seeking clarification on the procedure to be followed in respect of return of time expired drugs or medicines under the GST laws. The issues raised in the said representations have been examined and to ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act ) hereby clarifies the issue in succeeding paragraphs. 2. The common trade practice in the pharmaceutical sector is that the drugs or medicines (hereinafter referred to as goods ) are sold by the manufacturer to the wholesaler and by the wholesaler to the retai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d pay tax at the rate applicable to a composition taxpayer. In this scenario there will not be any availability of ITC to the recipient of return supply. c) In case the person returning the time expired goods is an unregistered person, he may return the said goods by issuing any commercial document without charging any tax on the same. d) Where the time expired goods which have been returned by the retailer/wholesaler are destroyed by the manufacturer, he/she is required to reverse the ITC availed on the return supply in terms of the provisions of clause (h) of sub-section (5) of section 17 of the CGST Act . It is pertinent to mention here that the ITC which is required to be reversed in such scenario is the ITC availed on the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it specified in sub-section (2) of section 34 of the CGST Act , the tax liability may be adjusted by the supplier, subject to the condition that the person returning the time expired goods has either not availed the ITC or if availed has reversed the ITC so availed against the goods being returned. c) However, if the time limit specified in sub-section (2) of section 34 of the CGST Act has lapsed, a credit note may still be issued by the supplier for such return of goods but the tax liability cannot be adjusted by him in his hands. It may further be noted that in case time expired goods are returned beyond the time period specified in the sub-section (2) of section 34 of the CGST Act and a credit note is issued consequently, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the common portal. Subsequently tax liability cannot be adjusted by such supplier. 3. It may be noted that though this circular discusses the scenarios in relation to return of goods on account of expiry of the same, it may be applicable to such other scenarios where the goods are returned on account of reasons other than the one detailed above. 4. It is requested that suitable trade notices may be issued to publicize the contents of this Circular. 5. Difficulty if any, in the implementation of this Circular may be brought to the notice of the Board. Hindi version will follow. (Upender Gupta) Commissioner (GST) - Circular - Trade Notice - Public Notice - Instructions - Office orders Tax Management India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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