Question7:

We (Party A) have sold Spring Steel Flat to party B situated in Tamil Nadu during November, 2016.  Now the party B has rejected the some part of the material. Now, we want to lift the rejected material from the party B and want to sell the rejected material to the party in Tamil Nadu or in Karnataka at the price of scrap.  Please advise us regarding the Invoicing of this transaction.    

Answer:

After the introduction of GST there is no concept of sale rejection or purchase rejection. It is equivalent to supply .Therefor your customer will issue invoice and will charge GST as applicable on it irrespective of the amount of credit availed at the time of purchase .The law relating to Clearance of input as such as was in earlier  Cenvat credit rule will not apply. Now coming to the problem of logistic You can procure material on payment of tax and get it deliver at some place as directed by you .This is popularly known as bill to ship to. Your customer will bill it to you and ship the material to Karnatka (new customer address)  You will take credit and raise a bill to new customer at the rate of scrap. Please give reference of delivery made by the Tamilnadu customer to reconcile the stock. Now one major question is whether you  can sale  the material in loss and the part of ITC can be retained  by you which is generated because of selling of goods at loss.   The answer is yes there is no bar in GST provided the customer is not related party in case of related party the case may be complicated because of application of valuation rules. We are not discussing it. (Reply dt. 30/11/2017)