20 February 2010
We received goods from "A co.",but purchase order placed by our mumbai branch also payment made by mumbai branch.what kind of entries and adjustment should be done in our books and which form(C or H)should be given to whom?
21 February 2010
I presume that the Vendor is in Maharashtra.
In my opinion the following shall suit your circumstances:
1. Journal Entry to be passed for payment made by the Mumbai office:: Purchase account Dr. To Mumbai Branch (Being Payment made by the Mumbai Branch for Purchases relating to the Kolkata office)
2. If the goods have been taken possession of by your Mumbai office and then sent to you, (Form F is applicable- if it can be treated as a transfer between two offices of the same organisation) it is a question of movement of goods by the same party. If the goods are invoiced by the vendor in your name and sent to you directly,(Form C is applicable) it will be an interstate purchase. While deciding this you need not consider who has made the payment as it is an internal adjustment within your organisation.
3. Form H is for export transaction only.
4. You may also check the invoice. It may also be an indicator. If local (Mumbai) VAT is charged by the Vendor, it can be considered as an inter office transaction (Form F is applicable). If CST is charged by them, it is covered by CST and Form C is applicable.
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