Sale on approval basis for inter-state basis...

Manasa Gontla   18 October 2019

Manasa Gontla

 36 points

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As per the concept of sale on approval basis... Goods can be sent to an agent or custodian on delivery chalan basis, and the invoice will be raised only after the actual sale to the third party and if the goods are rejected they were sent back to actual seller..

is this concept applicable on inter-state basis... can the goods be sent on delivery chalan on inter state and bill be raised.. when actual sale happened?


Santosh Kulkarni (Consultant)     18 October 2019

Santosh Kulkarni
 32 points

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Principal can send the goods to agent/custodian with DC, instead of Tax invoice. 

When the sale ratified/confirmed by agent/custodian invoice needs to be raised on the customer.

Please note that, Invoice on goods sent on approval basis needs to be raised at the time of delivery or with 6 months from removal from godown whichever is earlier. If approval is not received within 6 months, transfer to agent will be deemed as sale. Invoice needs to be raised on agent. Agent have option to return the goods to principal within 6 months.


Pankaj Rawat (GST Practitioner)     19 October 2019

Pankaj Rawat
GST Practitioner 
 2852 likes  38302 points

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Kindly refer circular 10/10/2017, DTD 18/10/2017

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