under Section 34 of the GST Act comes to rescue wherein the Registered Persons can issue a Document called “Credit Note”. The provisions of the Section 34, ibid, are reproduced for the benefit of readers as under;
34. (1) Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit notecontaining such particulars as may be prescribed.
(2) Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed:
Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.
If the above provisions of Law are perused, One can observe that the Pharma Wholesalers can issue the Credit Note while taking back the Sales Returns from the Retail Medical Shops who under Composition. And these Wholesalers can compute their Tax Liability/Outgo of a particular month by adjusting or reducing the amount of tax contained in the Credit Notes issued during that month. This Legal route can be utilized by the Wholesalers to handle the Business without any hassles. The specified particulars that are to be mentioned in the Credit Notes are provided in Rule 53 of CGST Rules and they include the simple details like Name, Address and GSTIN of the Wholesaler, Serial No, Name, Address and GSTIN of the Retail Trader, corresponding original Tax Invoice No concerning Sales Returns issued by the Wholesaler, Value of taxable Supply og goods, rate of tax and amount of tax debited to the recipient and Signature of the Wholesaler or his authorized representative.
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