Purchase credit memo or return order to foreign vendor
Purchasing goods in India from a place outside India is import of goods. For services, if the supplier is located outside India, the recipient is located in India and the place of supply is in India, then it's called Import of services. Purchase of goods and/or services from a foreign vendor are subject to reverse charge, that is, the person importing goods or services is required to remit tax to the Government.
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 foreign vendor has been explained in this document.
Hinweis
The rates and amounts below are illustrative. Confirm current import and refund requirements 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 Import.
- Select Item for goods, G/L Account for services, or Fixed Asset on the credit memo line. Check GST Group Code and HSN/SAC Code. Set GST Credit to Availment or Non-Availment to match the transaction being returned.
- GST Credit option can be changed on Purchase Credit Memo line.
The purchase return validation requires GST Assessable Value and Custom Duty Amount to be zero on credit memo and return order lines. Don't enter the original invoice's customs values directly in these fields on the return.
The following historical posting example uses an original purchase with a transaction value of INR 10,000, customs duty of INR 1,000, and a GST assessable value of INR 11,000. At the example rate of 18%, GST on the original INR 12,000 calculation base is INR 2,160. These values explain the original tax amount, not values to enter in the return's customs fields.
The tax amount in this example comes from the original purchase:
Component Amount Original GST Assessable Value 11,000 Original Custom Duty (BCD) 1000 Original GST Base Amount 12,000 Original IGST 2160 GL Entries for purchase credit memo or return order for imported goods or fixed asset where input tax credit is available are as following:
Particulars Amount Vendor Account (Transactional Value) 10000 IGST Refund Account 2160 IGST Receivable Account -2160 Purchase Account or Fixed Asset increase during the year (Transactional Value) -10000 GL Entries for purchase credit memo or return order for imported goods or fixed asset where input tax credit isn't available are as following:
Particulars Amount Vendor Account (Transactional Value) 10000 IGST Refund Account 2160 Purchase Account or Fixed Asset increase during the year (Transactional Value) -12160