Cancellation of purchase

It is done through credit note entry

Dear Mam

what is cancellation of sales/purchase?

does it mean invoice issued, goods not delivered yet and one of the party cancells the sale.

so in  a way its a way to cancel out the invoice already issued?

regards

Yes, credit note is raised to record sales return transactions

no mam what i am asking is what is the different between sales cancellation and sale return.

No mam

in chandigarh and punjab vat returns, separate details are required to be filled regarding sale returns and sales cancellation so there ought to be some difference.

also in tally though both the entries go into the credit note, there is a separate vat adjustment for both of them.

i am  unable to find out the meaning of sales cancellation though.

any thoughts?

You are right.... There is a difference but it is just for the sake of VAT returns in Punjab. In accounting terminology, both are same. Here is the difference for the sake of Punjab VAT:

Dear Mam

thanks for your continuous support.

It seems from reading the section you mentioned that in case of sale returns the goods have been delivered to the buyer and seller is claiming vat reversal on basis of debit note received by him from the buyer.

and in case of sale cancellation the good have NOT been delivered but invoice has been prepared and due to some reason the sales has been cancelled and now the seller is claiming vat reversal on basis of invoice copies he has. He must be in possession of all copies of invoice as he has not sent any of them to buyer as sale failed to materialise.

do u agree mam?

regards