stock transfer from branch to head office.

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R.ARUN (Querist)
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23 July 2009 We have head office @ Mysore (karnataka State) and sending goods through the stock transfer to our various branches located @ outside the karnataka against Form 'F'.

Now my question is should we issue the form 'F' to our branches having receipt of the defective or rejected material received out of the stock transfer sent to them against form 'F'?

Kindly reply.

Regards/arun.

Vishnu Saboo

Vishnu Saboo (Expert)
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24 July 2009 BRANCH SHOULD ISSUE THE FORM "F" WITH NET VALUE. I.E. INVOICE VALUE LESS REJECTION VALUE= NET VALUE.

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R.ARUN

R.ARUN (Querist)
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24 July 2009 BRANCH SHOULD ISSUE THE FORM "F" WITH NET VALUE. I.E. INVOICE VALUE LESS REJECTION VALUE= NET VALUE.
that is fine but what is to be done If the Form 'F' has been already issued. Is it necessary to give Form "F" to branch for receipt of defective or rejected materials?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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25 July 2025 Great question! Here’s the deal about **Form F and defective/rejected goods** in stock transfers from head office (HO) to branches outside Karnataka:

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### Key points:

1. **Stock transfer from HO to branches outside Karnataka** is typically done against **Form F** to avail concessional CST (Central Sales Tax).

2. **When defective or rejected goods are returned** from the branch to HO (or handled at branch level):

* If **Form F has already been issued** for the original stock transfer, and
* Some goods are later rejected or returned,

then the branch should issue **a fresh Form F for the net value** of goods **actually retained** (i.e., invoice value minus rejected goods).

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### What if Form F was already issued on the gross value (including rejected goods)?

* **Adjustments should be made** to reflect the rejection.
* The branch can issue a **revised Form F** or provide an **endorsement/credit note** clarifying the value adjustment.
* Alternatively, if returning goods back to HO, **Form C or other relevant documents** may be involved to manage tax liability.

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### Summary:

| Scenario | Action on Form F |
| -------------------------------------------- | ----------------------------------------------------------- |
| Stock transfer with defective goods accepted | Issue Form F on **net value** (invoice minus rejection) |
| Form F already issued on gross value | Issue credit note / revised Form F to adjust value |
| Rejected goods returned to HO | Manage return with appropriate tax documents (Form C, etc.) |

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### Bottom line:

* Branch **should issue Form F for net value** (excluding rejected goods).
* If Form F already issued for full value, corrections should be made via **credit notes or revised forms**.
* Proper documentation ensures correct tax treatment and avoids issues during assessment.

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Need help drafting a sample Form F or credit note format for this?

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