What is the treatment of sales return under GST law?

Please clarify whether advances received under the goods and services tax (GST) regime would attract tax and the document that needs to be raised at the time of receipt of advance. 

GST law provides for payment of the tax at the time of receipt of advance towards the supply of goods or services. However, with effect from November 15, 2017, the government has exempted all registered taxpayers, except persons opting to pay GST under composition scheme, from payment of tax on advances received after November 15, 2017, against supply of goods.

It is pertinent to highlight  that exemption from payment of GST is not applicable to advances received after November 15, 2017, for the supply of services. A registered taxpayer is required to issue receipt voucher at the time of receipt of advances for supply of goods or services. 

I have filed a summary return in Form GSTR 3B for October 2017. However, I forgot to fill up the details of zero-rated supplies. Is there any provision under GST law to revise it? 

GST law does not contain any provision for amending the details filed in summary return in FORM GSTR 3B. Any omission or error that occurred while filing the details can be amended/revised in the monthly return filed in Form GSTR 1. 

Please clarify whether a registered taxpayer under the composition scheme would also have to file GSTR 1 and GSTR 2? 

Under GST law, there is no requirement for a composition taxpayer to file any statement of outward or inward supplies in Form GSTR 1 and Form GSTR 2. Such a person is required to file a quarterly return in Form GSTR-4 by the 18th of the month after the end of the quarter. 

Amit Bhagat

I have sold a product to a customer charging the applicable GST.  The customer, however, has returned the goods as they were defective. What is the treatment of sales return under GST law? 

GST law recognises the concept of sales return and stipulates specific provisions for treatment of such transactions. At the time of undertaking a sale transaction, the supplier must issue a tax invoice charging applicable GST. If due to any issue, the goods are returned by the customer to the supplier, these can be sent back under cover of a delivery challan.

In respect of such sales return, the supplier should issue a credit note for claiming tax adjustment. However, such credit note should be issued latest by September 30 of the next financial year (succeeding the financial year in which the sale was undertaken) or before the filing of the GST annual return, whichever is earlier. Upon issuance of a credit note, the customer should be required to reverse the input tax credit availed at the time of purchase of goods being returned.  

Is a registered taxable person mandatorily required to pass on the benefit of reduction in cost under the GST regime? 

Yes. Recently, the government has also set up the National Anti-Profiteering Authority (NAA) consisting of Standing Committee and Screening Committee in every State and a Director-General of Safeguards in CBEC. The customers who feel a supplier has not passed on the benefit of reduced tax rate/input tax credit can file a complaint before the screening committee which would decide which complaints merit consideration.  
 

The writer is tax partner, PwC India. Aditya Khanna, associate director, PwC contributed to this column. The views expressed are experts’ own. Send your queries to yourmoney@bsmail.in