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
There is no section on “Purchase return” in the law.
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 :
Vendor Reconciliation is easy
No risk of goods sent, –But Debit Note not made.
No risk of goods sent, –Debit Note not sent by courier. Lost on the way.
Reco problems, No risk of vendor denying, I don’t know, I don’t remember.
GSTR 1 , I am not dependent on the vendor.
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.
He accepts in GSTR-2.
Cycle is complete
So, easy since GSTR2 is automatically made
Government gets the GST,
and no need to reconcile the Delivery Challans and Debit Notes / reversals.
Simplification during the GST audit after some years
Details in the PPT as under
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