To cure diseases we use medicine. Before buying medicine we see the date of expiry because, after the expired date, medicine loses its potentiality. It is illegal to sell medicine after the expiry date. The manufacturer sells medicine to the wholesaler and the wholesaler sells medicine to Retailer. If medicine is found to be expired, then it will be returned back to the Manufacturer. Central Board of Indirect Taxes and Customs (CBIC) provides guidelines for returning of expired medicine under the GST Act. (Goods and Service Tax Act). This article describes the Return of Expired medicine under GST.<\/p>\n\n\n\n
In this blog,\nwe will help you to know more about the procedure for the return of expired\nmedicine under the GST Act.<\/p>\n\n\n\n
In the\nPharmaceutical industry or sector, medicine has a defined term of validity and\nthe date of validity is printed on the medicine cover. The date of validity of\nthe medicine is known as expiry date. It is mandatory on part of every medicine\nretailer to return the expired medicine to the manufacturer. Expired medicine\nhas no value and importance in the Indian Pharmaceutical industry. Moreover, it\nis prohibited to sale expired medicine in India. <\/p>\n\n\n\n
GST is applicable to every taxable item including medicine. At the time of buying medicine from the manufacturer, the buyer paid tax on such medicine. So in case of expired medicine, everyone has a doubt regarding the return of taxes under the GST<\/a><\/strong> regime. Under the GST regime, Circular was issued for the return of expired medicine.<\/p>\n\n\n\n For returning\nan expired medicine, a retailer needs to\nhandover same to the wholesaler and after that, it is the duty of wholesaler to\nhandover same to the manufacturer.<\/p>\n\n\n\n Under the GST\nregime, there is a provision for the return of expired medicine. Certain\ndocuments are required for the return of expired medicine such as:<\/p>\n\n\n\n In the GST\nAct, 2016 there is a provision for the return of expired medicine. The\nprocedure as laid down under the CBIC Circular for the return of expired\nmedicine\/expired goods is given below:<\/p>\n\n\n\n As per\nCircular issued by CBIC, the return of expired medicine must be treated as a\nfresh supply. <\/p>\n\n\n\n The second option\navailable to the suppliers is issuing a credit note. Below you can find more\ndetails:<\/p>\n\n\n\n As per\nSection 34(1) of the Central Goods and Service Tax Act, 2017, in case the goods are returned back by any\nrecipient(Wholesaler or retailer), then the supplier(Wholesaler or Manufacturer)\nis entitled to issue a credit note in this regard.<\/p>\n\n\n\n Where the credit notes are issued prior to the September month of every financial year, then the tax liability of a concerned person who issued credit notes will be adjusted. If Manufacturer or Wholesaler fails to issue credit note within the time limit as prescribed under section 34 0f the CGST, then the supplier is bound to adjust the tax liability.<\/p>\n\n\n\n The supplier\nwill adjust tax liability subject to the condition that the person who returned\nthe expired medicine had either not availed the ITC or reversed the ITC against\nthe returned goods.<\/p>\n\n\n\n In case\nprescribed time limit as provided under section 34 of the CGST Act lapses, then\nthe supplier of such return of goods can still issue a credit note for such\nreturned goods.However, after the lapse of time, the supplier cannot adjust the\ntax liability.<\/p>\n\n\n\n Where,\nexpired goods were returned beyond the time limit as specified in section 34 of\nthe CGST Act and a credit note was already issued, then the supplier of such\nreturned goods is not required to declare credit note on the common portal.<\/p>\n\n\n\n In case,\na manufacturer destroyed the expired\ngoods returned by a retailer or supplier, then the manufacturer was bound to\nreverse the ITC attributable to the manufacturer. <\/p>\n\n\n\n In the below table, we demonstrate about the format of return of expiry medicine.<\/p>\n\n\n\nDocuments Required for Return of Expired Medicine <\/h2>\n\n\n\n
Procedure for Return of Expired Medicine under the GST Act<\/h2>\n\n\n\n
1. Return of Expired Medicine shall be treated as a fresh supply<\/strong><\/h3>\n\n\n\n
Various options Available to different Suppliers <\/h3>\n\n\n\n
2. Return of Expired Medicine by I
Adjustment of Tax Liability<\/h2>\n\n\n\n
Time Limit<\/h2>\n\n\n\n
Consequence of the Destruction of Expired medicine<\/h2>\n\n\n\n