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Credit note raised by supplier

kiran (accountant) (444 Points)

12 July 2023

we purchased raw material from X supplier due to a quality issue.we returned some quantity to the X supplier through tax invoice.

in that case X supplier raised CN against our invoice in his book.

CN raised by X it is correct way?

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8 Replies

RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 12 July 2023

Yes, Exactly Correct.
And Supplier must be show the CN in their gstr 1 return...

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kiran (accountant) (444 Points)
Replied 12 July 2023

We have already shown tax invoice in our GSTR1

RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 13 July 2023

Credit Note will be file in GSTR 1 by supplier... Not for Buyer...

kiran (accountant) (444 Points)
Replied 13 July 2023

We out defect material from the factory through invoice(Returned to Vendor) The same invoice will be booked by the supplier in his books which is already shown in our GSTR1 .

at the time of purchase our inventory is increased and the same reduse by defect quantity returned to the supplier through invoice.

Sanjana Mohanty (100 Points)
Replied 13 July 2023

Yes, it is the correct way for the X supplier to raise a credit note (CN) against your invoice in their books when you return some quantity of raw material due to a quality issue.

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Pranjal Gupta (141 Points)
Replied 13 July 2023

Based on the information provided, it appears that you purchased raw materials from Supplier X but had to return a portion of the quantity due to a quality issue. In this case, you issued a tax invoice to Supplier X for the returned quantity. Supplier X then raised a credit note (CN) against your invoice in their book.

The correctness of Supplier X raising a credit note depends on the specific circumstances and the agreement between you and Supplier X. In general, when goods are returned due to quality issues or other valid reasons, it is common for the supplier to issue a credit note to adjust the invoice amount accordingly.

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RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 13 July 2023

@ Mr Kiran,

If You are returned the defect material through Invoice then You can show the invoice in Your gstr 1 return. The Supplier will be take it as their purchase and account the same against Your purchase bill (defect material bill that is by supplier).

In this scenario no need any credit note from Supplier.