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How to declare negative purchase in ITR3

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john

proprietor

54 Points Posted on 30 August 2025

I have a client, normal business one who had some stock from last year, did trading for 6 months and returned the stock to supplier and closed business.

Tehcnically, lets suppose

opening stock: 40 Lacs

Sales: 5 Lacs

Gross Profit: 1 Lacs

Closing Stock: 0

Purchase: -36 Lacs

The purchase return was accepted by supplier and gave us credit note on GST2A for which we reversed all ITC and paid around 2-3 Lacs in cash.

Now, ITR form is not letting me put negative figure in purchases.

How to fix this?

One idea i was told was that i should keep closing stock and carry forward but business is closed and so is shop and there is no actual stock available so its not like the client is even doing business anymore.

Replies (4)

Quick Summary

This discussion addresses the challenge of declaring negative purchases in ITR3 when a business has returned stock to its supplier. The user's client returned unsold stock from the previous year, resulting in a negative purchase figure. The ITR form does not allow negative entries for purchases, leading to a filing dilemma. Suggestions include adjusting opening stock or potentially filing a complaint with the IT department if the software cannot accommodate the transaction.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 30 August 2025

As you have returned the stocks without any purchase in the year, so technically, it was returned from the opening stock. You may reduce the opening stock to 4 lakhs after return.

john

proprietor

54 Points Posted on 30 August 2025

yes... the opening stock was returned but wouldn't this show up as a flag where closing stock does not match opening stock?

also, we have credit notes for the year which might cause problems?

also, what if we prepare financials with negative purcahses but in ITR declare as you are saying? leave a note in financials?

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 30 August 2025

The recommendations are only for filing ITR as it doesn't accept negative figure. Check if filing complaint with ITD helps to resolve the issue.

Aashok Kumar Sharma

Finance/Compliance Consultant

76807 Points Posted on 07 November 2026

Correction: Do not artificially lower Opening Stock in your primary books just to bypass ITR validation; maintain true books and report gross figures or use a contra-purchase return ledger.
Resolution: Ensure the net effect on the Gross Profit and Net Profit matches your financial statements. Reconcile GSTR-2A credit notes with the ledger and document the business closure via a Note to Accounts.