Dear Ramu,
- About Credit memo, It happens as it happens in normal scenario, It doesn't happen from vendor side, Customer books the order with company and company raises the P.O. to vendor and bill the customer, If the goods are damaged or the goods have an excess amount in the price then company does the <CR> part.
- Goods receipt (optional) check is done, With Goods receipt check you will have the information about the quantity send to the customer and it help you pay your vendor according.
- for free goods concept you need to maintain a separate item category which is same as your <TAS> and make it not relevant for pricing!
- About your credit management doubt, No .P.R. gets generated if the credit limit is exceeded this is SAP standard.