Benefits of Using Purchase Return invoice, for sending out the Rejections
instead of Delivery Challan + Debit Note.
Method 1 :
–Make a Delivery Challan
–Ask for vendors’ Credit Note
Method 2 :
–Make a Purchase Return Invoice
–And charge him Value + taxes
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There is no section on “Purchase return” in the law.
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There is no notification / Circular on “Purchase returns”
example : if Sale : 1 lakh, ( inwards material ), and Purchase return invoice : Rs 5000 ( basic value ).. better make a Purchase Return invoice
Benefits no 1
–My books are correct, Vendor account is debited immediately.
–No risk of excess payment to Vendor
Benefit no 2
–E way bill /
–Document for the “road” movement
–no Risk on the Road
Benefit 3 :
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Vendor Reconciliation is easy
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No risk of goods sent, –But Debit Note not made.
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No risk of goods sent, –Debit Note not sent by courier. Lost on the way.
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Reco problems, No risk of vendor denying, I don’t know, I don’t remember.
Benefit 4
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GSTR 1 , I am not dependent on the vendor.
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I debit him straight away. I charge him the basic and the tax on that. In GSTR-1, I show this as my outward supply.
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He accepts in GSTR-2.
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Cycle is complete
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So, easy since GSTR2 is automatically made
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Government gets the GST,
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and no need to reconcile the Delivery Challans and Debit Notes / reversals.
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Simplification during the GST audit after some years
Details in the PPT as under
a Purchase Return to Vendor – Purchase return invoice
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