hi, if the goods are damaged in transportation and the buyer ask for a credit note, so if we issued a credit note with gst then we need to reverse itc or not.
or can be issued a credit note without gst if we don't want to reverse itc.
12 Replies
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 19 July 2021
Yes ITC should be reversed
SUMIT BADYAL
(709 Points)
Replied 19 July 2021
But if we use itc and pay gst liability.... and we issue the credit note without gst, we don't decrease our gst liability, is this possible.
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 19 July 2021
First of All the ITC need to be Reversed.
In term of Section 34 of CGST Act in GST the Supplier can issue credit or Debit note, yes for accounting purposes you can issue credit note .
Note : The damage goods can be returned on delivery challan.
In term of Section 34 of CGST Act in GST the Supplier can issue credit or Debit note, yes for accounting purposes you can issue credit note .
Note : The damage goods can be returned on delivery challan.
CA. Abhilash Krishnan P
(Chartered Accountant)
(533 Points)
Replied 19 July 2021
If your customer is willing to pay gst for damaged goods it can be done..but normally customers would require full credit note for damaged goods..so itc should be reversed if its a full credit note...and as per provisions itc of damaged goods are blocked
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 20 July 2021
Raise Credit Note and reverse the ITC.
Imthias ahamed Kormath
(910 Points)
Replied 20 July 2021
The damaged goods may return by the supplier,with his own invoice on the basic, that his recipients reject the above supply,for this purpose supplier generate another eway bill with delivery note.
If any advance paid by the recipients, the itc may b reversed.
If any advance paid by the recipients, the itc may b reversed.
SUMIT BADYAL
(709 Points)
Replied 20 July 2021
If we added gst amount in the sale amount not show gst amount separate in credit note then. ...
CA. Abhilash Krishnan P
(Chartered Accountant)
(533 Points)
Replied 20 July 2021
You mean credit note inclusive of gst?
CA Akshay Hiregange
(Partner - Audit & Assistance)
(4515 Points)
Replied 20 July 2021
Hi Sumit
Full value Credit note with GST is to be disclosed as reduction of GST liability and not as ITC claim.
If Original invoice and tax was paid in previous month and credit note with GST raised in subsequent month, it can be setted off with subsequent month liability.
The recipient would not be able to use damaged goods in his business and would not accept the tax invoice as he will not be able to take credit of the same.
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 21 July 2021
Yes agree with CA Akshay Ji
& in Addition to his reply, in term of section 33 , in GST it's mandatory to show tax on supply, cannot issue Including tax.
& in Addition to his reply, in term of section 33 , in GST it's mandatory to show tax on supply, cannot issue Including tax.
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 21 July 2021
You have to raise Credit Note with GST, if you will raise without GST then you have to pay tax for those goods which are not usable in business.
Raising credit note with GST will reduce your tax liability, so charge GST on credit note also.
Raising credit note with GST will reduce your tax liability, so charge GST on credit note also.
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