Hi I am a manufacturer and seller in Chennai and have a query concerning VAT filing if anyone could please reply.
We supply bags to retail outlets in chennai and to most of them we have a payment on sale basis agreement. The procedure from supply to payment is as follows;
1. We create a Delivery Challan(DC) of the goods placed for sale at the retail outlet.
2. At the end of the month the retail outlet advises us on the sold and unsold goods.
3. We create a sale invoice on the goods sold.
4. The unsold goods will remain with the retail outlet for sometime for sale. If after a certain period no sale occurs on those goods. A return DC is requested from the retail outlet.
VAT filing for the end of the month indicates only the goods sold at the outlet and not all the goods provided in the DC. Please advise if this procedure is correct. This is to avoid the hassle of keeping a check on the return VAT which has to be filed at the end of every month incase of unsold goods.
Hoping to have this answered by someone.
Thanks,
CAclubindia
