When Duty Paid Goods Are Returned
By Registered Taxable Person
Duty paid goods returned by a registered taxpayer will be treated as ‘Deemed Supply’ and tax has to be paid on this by the person returning the goods. This is because the goods were sold before GST, allowing the buyer to claim input tax credit on the tax paid while discharging output tax liability, or to carry forward the input tax credit under GST. The seller, however, will not have been allowed input tax credits in the old regime.
When such goods are returned, GST will be discharged by the person returning the goods. The tax paid will be allowed as input tax credit to the original seller of such goods thus eliminating loss.
By Unregistered Taxable Person
The seller of such goods will be allowed refund of tax paid at the time of original sale if the following conditions are satisfied:
the goods were removed/sold within 6 months prior to the appointed day
said goods were returned within 6 months from the appointed day
When Exempted Goods Are Returned
When goods which are exempt under the current tax regime are returned post implementation of GST by a registered taxpayer, no tax is payable by the person returning the goods if the below mentioned conditions are met:
the goods were removed/sold within 6 months prior to the appointed day
said goods were returned within 6 months from the appointed day
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