As per Circular issued by CBIC, the return of expired medicine must be treated as a fresh supply. The retailer or wholesaler can return the expired medicine to the manufacturer. Issuance of Invoice is mandatory for the return of such expired medicine.

When expired medicines are returned to a wholesaler, they are treated as a fresh supply and are usually destroyed by the manufacturer:

• Manufacturer destroys the goods

  The manufacturer reverses the ITC that was used when the expired goods were received. The ITC that needs to be reversed is the one used when the goods were returned, not the one used when they were manufactured.
• Manufacturer purchases the goods

  If the goods are deemed a fresh supply, the manufacturer or wholesaler will purchase them. 

• Here are some other things to know about returning expired medicines:

The retailer or wholesaler must issue an invoice for the returned medicine. The invoice should include the value of the medicine at the rate it was originally purchased.

 An unregistered person can return expired goods by issuing a commercial document without charging tax.

A reverse distribution company can be used to coordinate the return process. The company sorts and batches the products, calculates the return credit value, and sends the credit to the pharmacy. 

• Expired medicines can be less effective or risky because their chemical composition or strength may have changed. Some expired medications can grow bacteria, and sub-potent antibiotics can fail to treat infections.