ECommerce Wrong return Gst related treatment

Hey Ankit! This is a tricky but common issue in e-commerce returns and stock management. Here’s how you can approach it under GST:

Situation Recap:

• You sold goods on Meesho.

• Returned goods received are not the same products but worthless items.

• The actual products are lost/stolen but still show in your books as stock.

• You made a sales return entry as per Meesho’s calculation.

What you should consider:

1. GST on Stock Lost/Theft:

   • GST is payable on actual supplies made.

   • If goods are lost/stolen after supply, it is not a supply to you or anyone else.

   • So, you do not have to pay GST again on the lost goods.

   • But you need to reconcile your books.

2. Accounting Treatment:

   • Since the goods are lost/stolen and no physical stock is available, you should write off the stock.

   • Pass a stock write-off entry to remove these items from your inventory.

   • This write-off is a business loss and can be shown in your Profit & Loss.

3. Sales Return Entry:

   • The sales return entry as per Meesho’s records is correct from their side.

   • You should adjust your books to reflect the actual physical situation (goods lost, worthless items received).

   • If Meesho issues a credit note or refund for the lost goods, account for it accordingly.

4. GST Return Treatment:

   • If you have already declared the original supply and paid GST on it, no further GST is payable for the lost goods.

   • The sales return should be accounted in your GST return for the period it occurred (if not done yet).

   • No GST is payable on the stock write-off since it is not a supply.

5. Documentation:

   • Keep records of the theft, police complaints (if any), correspondence with Meesho.

   • Maintain proper documentation to justify the stock write-off.

Summary: