On which value "c" form will be issued

This query is : Open

C.A Alok Mukherjee (Querist)
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24 October 2011 A company had given a supply order of 10 items to a party x. The value of 10 items is say rs 1000 i.e all inclusive. Now when the goods was in transit, 4 goods were damaged the value for which the buyer is going to lodge claim from insurance company. Supplier will be paid fully for 10 items since insurance is at buyer's end. Buyer had actually received 6 good items and therefore purchase was booked for 6 items but waybill and the supplier's invoice was for 10 items. My question is on which amount, the seller will issue "C" form.
a. on full value as mentioned in waybill/invoice

or

b. on the value of purchase of the goods actually received i.e value for 6 goods.

The entry made by the company
Insurance Receivable Dr 400
Purchase Dr 600
To X 1000

X A/c Dr. 1000
To Bank 1000

Ram Avtar Singh

Ram Avtar Singh (Expert)
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24 October 2011 For your convenience you can issue form for gross amount of Bill.

C.A Alok Mukherjee

C.A Alok Mukherjee (Querist)
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24 October 2011 Dear Mr. Singh,

In west Bengal "C" form can be issued online on the basis of booking of purchase based on GRN. Had it been the case, we are authorised to issue "C" form for which we are legally booked purchase. On the supplier's part it is supplier's right to get a "C" form on the value of his cst sale. We are in dilemma what we should do which is legally correct at the same time seller would not be deprived. Since insurance claim can not be matched with purchase we are looking your valued advice what we should follow legally.

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Jinesh Bansal

Jinesh Bansal (Expert)
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25 October 2011 You can make entry in the following way and issue C Form for full value.

Purchase a/c- 1000

To X a/c- 1000

Insurance claim a/c- 400

To Purchase a/c- 400

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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26 October 2011 Mr. Mukherjee,
As you say your supplier is not resposible for damages in transit. You have taken insurance for the transit and claim it also.So the supplier is not affected.The GRN also shows despatch of 10 items and their receipt,of course some in damaged condition.But you pay Rs1000/- to your supplier.Therefore,as Mr Singh has advised, you have to issue 'C' form for the full value of 10 items.If your supplier can issue a credit note to you,it can be adjusted in the returns and books.
MJK

C.A Alok Mukherjee

C.A Alok Mukherjee (Querist)
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27 October 2011 thanks all, we have to show grn at full value i.e instead of 6 it will be 10, then 4 rejected items will be shown as rejection in stores ledger for this insurance valuer had already submitted a report. The items will be treated as scrap and the salvage will be adjusted against the final insurance claim. Hence as stated by all of you there would not be any issue of C form.