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TMI BlogCircular to clarify the procedure in respect of return of time expired drugs or medicines.X X X X Extracts X X X X X X X X Extracts X X X X ..... T laws. The issues raised in the said representations have been examined and to ensure uniformity in the implementation of the law across the field formations, in exercise of the powers conferred under section 168(1) of the Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as the KGST Act ) the issue is hereby clarified in succeeding paragraphs. 2. The common trade practice in the pharmaceutical sector is that the drugs or medicines (hereinafter referred to as goods ) are sold by the manufacturer to the wholesaler and by the wholesaler to the retailer on the basis of an invoice/bill of supply as case may be. It is significant to mention here that such goods have a defined life term which is normally referred to as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returning the time expired goods is an unregistered person, he may return the said goods by issuing any commercial document without charging any tax on the same. d) Where the time expired goods which have been returned by the retailer/wholesaler are destroyed by the manufacturer, he/she is required to reverse the ITC availed on the return supply in terms of the provisions of clause (h) of sub-section (5) of section 17 of the KGST Act. It is pertinent to mention here that the ITC which is required to be reversed in such scenario is the ITC availed on the return supply and not the ITC that is attributable to the manufacture of such time expired goods. Illustration : Supposedly, manufacturer has availed ITC of ₹ 10/- at the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has either not availed the ITC or if availed has reversed the ITC so availed against the goods being returned. c) However, if the time limit specified in sub-section (2) of section 34 of the KGST Act has lapsed, a credit note may still be issued by the supplier for such return of goods but the tax liability cannot be adjusted by him in his hands. It may further be noted that in case time expired goods are returned beyond the time period specified in the sub-section (2) of section 34 of the KGST Act and a credit note is issued consequently, there is no requirement to declare such credit note on the common portal by the supplier (i.e. by the person who has issued the credit note) as tax liability cannot be adjusted in this case. d) Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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