goods return

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Rakesh Sharma (Querist)
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19 June 2017 dear experts, As per GST act debit and credit note is to be issued by only supplier. Sir, we receive good of different quality and the same to be returned to supplier. How shall we return this goods to supplier? please advise me. RAKESH SHARMA

Rakesh Sharma

Rakesh Sharma (Querist)
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20 June 2017 please reply, it's my heartly request

Rakesh Sharma

Rakesh Sharma (Querist)
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20 June 2017 dear experts, please help me resolve this query.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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26 July 2024 When returning goods to a supplier under the GST regime, the process involves issuing a credit note by the supplier and following specific procedures to ensure compliance with GST laws. Here’s a step-by-step guide on how to handle the return of goods:

### **1. Issuance of Credit Note**

**a. Role of Supplier**
- Under the GST Act, the supplier is responsible for issuing a credit note when goods are returned. This is because the credit note is a document that reduces the original tax liability and adjusts the input tax credit (ITC) for the buyer.

**b. Steps for Goods Return**

1. **Return Goods to Supplier**:
- **Prepare Delivery Challan**: Create a Delivery Challan for the return of goods. This document should include details about the returned goods, including quantity, description, and reason for return.
- **Transport**: Ensure that the goods are transported back to the supplier's location with the Delivery Challan.

2. **Supplier Issues Credit Note**:
- **Credit Note Issuance**: Once the supplier receives the returned goods, they should issue a credit note to you. The credit note should include:
- Details of the original invoice.
- Description and quantity of the returned goods.
- Reason for the return.
- Amount of tax to be adjusted (ITC).
- **Update Records**: The supplier will update their GST records to reflect the reduction in tax liability and adjust the ITC accordingly.

### **2. GST Compliance**

**a. Adjusting ITC**

1. **Buyer’s Responsibility**:
- **ITC Adjustment**: As a recipient of the credit note, you should adjust the ITC in your GST returns. This is because the credit note issued by the supplier will affect your input tax credit.
- **Record the Credit Note**: Ensure that the credit note received from the supplier is recorded and reflected in your GST returns.

2. **Filing GST Returns**:
- **GSTR-1**: The supplier must include the credit note in their GSTR-1 return.
- **GSTR-3B**: The buyer should reflect the adjustment in their GSTR-3B return.

**b. Documentation**:
- **Maintain Records**: Keep copies of the Delivery Challan, credit note, and any correspondence related to the return for audit and compliance purposes.

### **3. Practical Considerations**

1. **Communication with Supplier**:
- **Inform the Supplier**: Before initiating the return, inform the supplier about the return of goods and ensure they are prepared to issue a credit note upon receipt.

2. **Transport and Logistics**:
- **Coordinate Transport**: Ensure that the transportation of returned goods is well-coordinated and documented to avoid any issues.

3. **GST Compliance**:
- **Reconcile**: Regularly reconcile your GST records to ensure that all returns and adjustments are accurately reflected.

### **Summary**

1. **Return Goods**: Prepare a Delivery Challan for returning goods to the supplier.
2. **Supplier’s Role**: The supplier issues a credit note to you upon receipt of the returned goods.
3. **ITC Adjustment**: Adjust the ITC based on the credit note received.
4. **GST Returns**: Reflect the credit note in your GST returns (GSTR-1 and GSTR-3B).
5. **Documentation**: Maintain records of all documents related to the return.

### **Additional Notes**

- **Supplier's Responsibility**: Since the credit note must be issued by the supplier, coordinate with them to ensure compliance.
- **ITC Adjustment**: Always ensure ITC adjustments are accurately reflected in your GST returns to maintain compliance.

If you encounter any specific issues or need further clarification, consulting a GST expert or tax advisor can provide tailored advice based on your particular circumstances.