Returns and debit notes

When goods are defective, excess or fail QC, you return them to the vendor. A purchase return removes the stock, and a debit note reverses the input tax credit (ITC) and adjusts your payables, keeping stock, GST and accounts all correct.

Purchase return

Return goods against the goods receipt they came in on:

Open Purchase Return and select the goods receipt (or QC-rejected stock).
Choose the line(s), enter the return quantity and a reason.
Commit the return, it posts a stock-out movement from the warehouse.

The return quantity can’t exceed the on-hand received quantity for that GR line, and the return references the original PO and GR. Committing a purchase return raises the vendor debit note (see below).

Rejection and return-to-vendor

When goods fail QC or arrive damaged, stores reject them:

Record the rejection with quantity, reason, batch and optional photo evidence.
Rejected quantity does not increment available stock, it routes to a return-to-vendor (RTV) holding location, with an RTV record capturing the dispatch details.
A debit note is auto-drafted against the vendor, referencing the GR and PO line, and routes through finance approval.
The vendor is emailed when the debit note is raised, and the rejection/RTV and its debit note appear on the PO detail.

Every step is audited, and rejection is restricted to the rejection permission.

Supplier debit note

A debit note offsets the value of returned or rejected material and keeps your GST and payables right:

It’s raised for the returned value plus tax.
It reverses ITC using the same tax split (CGST/SGST or IGST) as the original receipt.
It adjusts accounts payable: reducing what you owe or raising a receivable from the vendor, and references the original PO/GR.
It carries the HSN/SAC and is recorded for GST reporting.

Purchase triggers the debit note; Finance posts the accounting entries.