{"id":23278,"date":"2021-01-02T12:49:33","date_gmt":"2021-01-02T07:19:33","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=23278"},"modified":"2023-03-17T18:52:56","modified_gmt":"2023-03-17T13:22:56","slug":"procedure-to-return-of-expired-medicine-under-the-regime-of-gst","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/procedure-to-return-of-expired-medicine-under-the-regime-of-gst\/","title":{"rendered":"Comprehensive Study on Procedure to Return of Expired Medicine Under The Regime of GST"},"content":{"rendered":"\n<p class=\"has-drop-cap\">When medicines are delivered to retailers in large quantities by\nwholesalers and the retailer cannot sell all supplied medicine before the\nexpiration date, in that condition, they return the medicines to wholesalers.\nTo return of expired medicine is allowed under the regime of Goods &amp;\nService Tax.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/procedure-to-return-of-expired-medicine-under-the-regime-of-gst\/#The_Amendment_Under_Drugs_Cosmetic_Rules_1945\" >The Amendment Under Drugs &amp; Cosmetic Rules,\n1945<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/procedure-to-return-of-expired-medicine-under-the-regime-of-gst\/#Process_for_the_Return_of_the_Time_Expired_Goods_under_GST\" >Process for the Return of the Time Expired Goods under\nGST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/procedure-to-return-of-expired-medicine-under-the-regime-of-gst\/#Document_to_be_Issued_on_Expired_Goods\" >Document to be Issued on Expired Goods<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/procedure-to-return-of-expired-medicine-under-the-regime-of-gst\/#Concluding_Remark\" >Concluding Remark<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Amendment_Under_Drugs_Cosmetic_Rules_1945\"><\/span>The Amendment Under Drugs &amp; Cosmetic Rules,\n1945<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There was confusion prevailing within the pharmaceutical industry which are successfully availed the <a href=\"https:\/\/corpbiz.io\/drug-license\"><strong>Drug License<\/strong><\/a> with regarding the treatment of the time expired drugs\/medicines under GST. In order to overcome the said confusion, the Central Board of Indirect Tax and Customs, announced a notification with&nbsp;<strong>circular no. CBIC\/20\/16\/04\/2017- <\/strong>GST on dated 26th October 2018, has provided the procedure accompanied in return of expired medicines.<\/p>\n\n\n\n<p>The circular has\ncome in the existence of two options for the return of expired medicines is as\nfollows:-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">First Option<\/h3>\n\n\n\n<ul><li>If the business returning goods is an\nincorporated establishment, it may grant a tax invoice by considering returning\nas a fresh medicine supply.<\/li><li>The value of the fresh supply of medicine will\nbe equal to the original supply of medicine&#8217;s value.<\/li><li>The returned expired medicine recipient will be\neligible to demand Input Tax Credit based on such tax invoice.<\/li><li>If the manufacturer disposes of expired drugs,\nhe needs to reverse ITC available on the return supply.<\/li><li>The reversal is to be made on the ITC used on\nsuch returned supply rather than the original supply of medicines.<\/li><li>If the returning medicines are a composition\ndealer, he may issue a bill of supply by considering the return as a fresh\nsupply.<\/li><li>Further, the returned medicines&#8217; recipient shall\nnot be eligible to demand ITC in the said case.<\/li><li>In case the person who is returning goods is\nunregistered, he may return the goods by issuing a commercial document without\ncharging any tax on the same.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Second Option<\/h3>\n\n\n\n<ul><li>The wholesaler \/manufacturer may issue a tax\ncredit note, and the medicines may be returned under cover of a delivery\nchallan.<\/li><li>Accordingly, the wholesaler \/manufacturer will\nbe able to claim a tax adjustment, subject to reversal of credit by the\nrecipient of a tax credit note.<\/li><li>The said credit notes are to be issued before\nSeptember, following the end of the financial year. <\/li><li>If said credit notes are not issued within the\nsaid deadline, a commercial credit note may be issued by the manufacturer\/\nwholesaler.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Process_for_the_Return_of_the_Time_Expired_Goods_under_GST\"><\/span>Process for the Return of the Time Expired Goods under\nGST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The retailer\/ wholesaler can follow either the below-discussed process to return the time expired medicines under <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST<\/strong><\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Conditions when Return of Expired Medicines to be\nTreated as Fresh Supply<\/h3>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"985\" height=\"334\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Conditions-when-Return-of-Expired-Medicines-to-be-Treated-as-Fresh-Supply.png\" alt=\"Conditions when Return of Expired Medicines to be Treated as Fresh Supply\" class=\"wp-image-23279\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Conditions-when-Return-of-Expired-Medicines-to-be-Treated-as-Fresh-Supply.png 985w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Conditions-when-Return-of-Expired-Medicines-to-be-Treated-as-Fresh-Supply-300x102.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Conditions-when-Return-of-Expired-Medicines-to-be-Treated-as-Fresh-Supply-768x260.png 768w\" sizes=\"(max-width: 985px) 100vw, 985px\" \/><\/figure><\/div>\n\n\n\n<p>The below\ndiscussed are the conditions return of expired medicines to be treated as fresh\nsupply.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Registered Person <\/h4>\n\n\n\n<p>If the person\nreturning the expired medicine is a registered person, the return of the goods\nwill be treated as a fresh supply<\/p>\n\n\n\n<ul><li>Value of the said goods as mentioned &nbsp;in the invoice based on the goods were provided earlier may be taken as the value of such return supply<\/li><li>&nbsp;Recipient is eligible to avail Input Tax Credit on said return supply subject to section 16 of the <strong>CGST Act<\/strong><sup><a href=\"https:\/\/cbic-gst.gov.in\/pdf\/CGST-Act-Updated-30092020.pdf\"><strong>[1]<\/strong><\/a><\/sup><strong>.<\/strong><\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Composition Taxpayer<\/h4>\n\n\n\n<p>If the person\nreturning the time expired medicine is a composition taxpayer;<\/p>\n\n\n\n<ul><li>Return the said medicines by issuing a bill of\nsupply and pay tax at the rate applicable<\/li><li>The recipient is not eligible to avail ITC of\nsaid return supply<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Unregistered Person<\/h4>\n\n\n\n<p>If the person\nreturning the expired medicine is not\na registered person, the return of the goods will be treated as fresh\nsupply<\/p>\n\n\n\n<ul><li>Recipient may return the said medicines by\nissuing any commercial document without imposing any tax liability.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">When the manufacturer disposes of the expired\nmedicines which have been returned by the retailer\/wholesaler;<\/h4>\n\n\n\n<p>He\/she is needed\nto reverse the ITC used on the return supply u\/s 17(5) (h) of the CGST Act.\nHowever, ITC which is needed to be reversed in the situations where the ITC is\navailable on the return of supply and not in the ITC that is attributable to\nthe manufacture of such time expired medicines.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Document_to_be_Issued_on_Expired_Goods\"><\/span><strong>Document to be Issued on Expired Goods<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>As\nper the section 34(1) of the CGST Act, the&nbsp;wholesaler or the manufacturer who\nhas supplied the goods to the retailer, as the case may be, has the option to issue\na credit note in related to the expired medicines returned by the wholesaler or\nretailer. <\/li><li>In\ncase the credit note is provided within the stipulated time specified in section\n34(2) of the CGST Act, the tax liability may be regulated by the supplier,\nprovided that the person returning the time expired medicine has either not\nused the ITC or if used has reversed the ITC so used against the medicines\nbeing returned. <\/li><li>In case they are returned the expired medicines\nbeyond the time period specified and a credit note is provided, there is no\nrequire declaring such credit note on the common portal by the supplier cannot\nadjust as tax liability.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concluding_Remark\"><\/span>Concluding Remark<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>We are all aware of medicine&#8217;s healing power and the remedial benefits of medication in case of a vivid disease. The medical culture and studies have provided us such benefits in the form of drugs\/tablets to cure us and others. The above-said articles highlight the area where we cannot sell out such medicines among the public before their expiry dates. In such a scenario, the drug and cosmetics act has provided us different legal methods to return the unseal and expired medicines to the resource or its origin. The codified law also provides us some of the benefits and relaxations in returning those medicines in income tax. This guideline is incorporated under the act for the public interest, and we must duly follow it.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/complete-overview-on-drug-license-rules-in-india\/\">A Complete Overview on Drug License Rules in India\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When medicines are delivered to retailers in large quantities by wholesalers and the retailer cannot sell all supplied medicine before the expiration date, in that condition, they return the medicines to wholesalers. To return of expired medicine is allowed under the regime of Goods &amp; Service Tax. The Amendment Under Drugs &amp; Cosmetic Rules, 1945 [&hellip;]<\/p>\n","protected":false},"author":32,"featured_media":23281,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[223],"tags":[1384],"acf":{"service_id":"98"},"authorName":"Komal Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/processed.jpeg","authorDescription":"Komal Singh is a Legal scholar, having diverse experience in scripting research papers, articles &amp; dissertations, which serves her main interest &amp; competent in drafting legal documents. She has polished her skills in dealing with the matter related to consumer affairs and now building intelligible Legal Content for Corpbiz.","postViews":8836,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/23278"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=23278"}],"version-history":[{"count":19,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/23278\/revisions"}],"predecessor-version":[{"id":53552,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/23278\/revisions\/53552"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/23281"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=23278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=23278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=23278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}