Credit note

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A seller transferred stock to a second party after the first party refused it. The seller issued partial credit notes to the first party and sale invoices to the second party. While the seller has already filed their GSTR1, the advice is that this practice can cause issues. In the future, an e-way bill should be generated for the second party, indicating the first party's premises as the consignor. A first party cannot issue a debit note under GST regulations.

nitin

nitin (Querist)
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29 November 2020 Dear expert
suppose seller sold the goods to party last month and within one week party refused to take goods more. then seller transferred the stock to his nearby 2nd party same day. he showed credit notes of 1st party divided in parts (due to e-way bill ) and generate sale invoices to 2nd party of same stock in last month. is it right procedure for this situation ?? what if 1st party give him debit note for the same in current month as he showed sale return in last month.?? please give your suggestion. thanks in advance.

Lekhraj sood

Lekhraj sood (Expert)
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01 December 2020 Such a practice can invite trouble for you.
The right thing would have been to generate another E-way bill (based on the invoice to second party ) for second party showing consignor place as premises of 1st Customer.
The first party can not give debit note as not allowed under GST by the Recipient.

nitin

nitin (Querist)
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01 December 2020 but sir now seller already transferred all the stock having amt. around 2 lacs from 1st party to 2nd party last month. he simply takes 5-6 debit notes from 1st party having amt. below 50k in different dates of last month and give credit note against the same to 1st party and then billed 5-6 invoices to 2nd party having amt. below 50k in different dates of last month. & seller also filed gstr1 of oct. month. so now what is the right option for seller ?? sir please guide.

Lekhraj sood

Lekhraj sood (Expert)
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02 December 2020 Nothing you can do now for this transaction. Take a note for the future.

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