GST Law on Defective Goods' disputes between Buyer and Seller

GST Invoice Goods of Rs.10 lacs sold. Buyer says goods are defective but do not return the defective goods to seller and propose to settle the said invoice for 5 lacs. Seller not agreed to settlement and refused to issued Credit Note. Buyer took ITC on total value of Rs.10 lacs. Ques. A : What are the remedies in GST Law for Buyer to avoid the payment of Rs.5 lacs for defective goods ? Ques. B : Whether Seller can also claim his entire amount of Rs.10 lacs as buyer has claimed full ITC on Rs.10 lacs of goods. Pls. Reply as per GST Law.

@Neeraj_Goyal Hello Neeraj,

Buyer can claim GST Input credit once it is reflected in GSTR2B. Thus, if seller have reported and paid GST on entire amount of ₹10 lacs, buyer can claim ITC on ₹10 lacs. Going forward if seller agrees to settle at ₹5 lacs and issues credit note of ₹5 lacs, then buyer needs to report debit note and reverse the ITC claimed on ₹5 lacs (either against credit or pay in cash).

Hope this helps !

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