Purchase return of goods and services to composite vendor or purchase return of exempted goods and services with no GST impact
A composite vendor is a vendor whose aggregate turnover in a financial year doesn't exceed 50 lakh rupees and has opted for composition scheme. A composite vendor neither collects tax from the recipient of supplies nor passes on any credit of Input Tax. Hence, no GST is computed if the purchases are made from a composite vendor.
On the vendor card, set GST Vendor Type to Composite. Business Central requires either GST Registration No. or ARN No. for this vendor type. When you enter a GST registration number, also specify State Code and the required PAN details. The composite vendor return scenario doesn't calculate GST.
A buyer may have to return the goods or issue credit note due to various reasons like damaged goods, quality issues etc.
Process for purchase returns to a composite vendor has been explained in this document.
Hinweis
The turnover threshold above is historical background, not current eligibility guidance. Confirm the vendor's current GST classification separately.
Create a purchase return order or credit memo
- [!INCLUDE [open-search](../../includes/open-search.md)] Purchase Return Orders or Purchase Credit Memos, and then choose the related link.
- Select Vendor on Purchase Credit Memo header, GST vendor type should be Composite or Exempted.
- Select Item Code for goods, G/L Account for Service purchase, Fixed Asset for Fixed Asset purchase and Charge (Item) for Item Charge on Purchase Credit Memo line.
- Check the line's Exempted value against the original purchase. A vendor with GST Vendor Type set to Exempted requires exempt lines.
For a return of exempt goods to a registered vendor, retain Registered as the vendor type and use the line's Exempted field. Don't change the vendor to Composite merely because the returned goods are exempt.
For example, Purchase Return Order or Credit Memo has been issued for INR 10000 on which no GST is charged.
GL Entries are as following:
| Particulars | Amount |
|---|---|
| Vendor Account | 10000 |
| Purchase or Services or Fixed Asset increase during the year Account | -10000 |