Sale return effect in rg1 register

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CA Prateek jain (Querist)
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24 June 2013 Dear All,
we are Stock transferring a product to our unit in different state on 'F' Form.
That Plant transfer some rejected qty on excise invoice, then we do rework and send back on excise invoice.
I want to know what kind of documentation we need to record regarding excise purpose. and Should this rejected qty reflect RG 1 register.
Can i remove the rework Qty on 'Remove as such basis' without effecting RG1 register.
Please Suggest.

Regards:
Prateek jain

Arun Kumar Singh

Arun Kumar Singh (Expert)
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25 June 2013 goods will be removed on challan after rework you can remove the goods to buyer and no need to put the quantity and value in RG-1 again.

CA Prateek jain

CA Prateek jain (Querist)
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27 June 2013 Thanks Arun,
The buyer is sending goods on proper excise invoice and we are taken credit of that,so reworked good shall be removed on excise invoice only.
My concern was only about entry in RG-1 register, and on which section of excise act these goods are removed.
Should we need to maintain separate register for this type of transaction,as this could be regular transaction for our unit.
Please suggest.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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23 July 2025 Here’s a clear explanation on the **effect of sale returns and rework on RG-1 register under Central Excise** for your situation:

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### 1. **Background**

* You transfer goods interstate to your plant under **‘F’ form**.
* The receiving unit sends back some **rejected quantity on excise invoice**.
* You rework those goods and send them back on another excise invoice.

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### 2. **Recording in RG-1 Register**

* **RG-1** is the **Manufacturing and Removal Register** showing goods manufactured and removed (sold/ transferred) during the period.
* The **original rejected quantity received back** is a **return** and would normally reduce the outward quantity.
* After **rework**, when you send goods back on excise invoice, these are considered **removals** again.
* **Do you need to reflect rejected qty or reworked goods in RG-1?**

* **Rejected goods returned by your unit to the sending plant are removals from your unit** and should be recorded in RG-1 on the day of removal.
* The **reworked goods sent back to the buyer are also removals and must be recorded in RG-1** on the date of removal.
* If the goods are removed “as such” (without rework), you may **remove them as such without re-entering in RG-1** for rework, but since your case involves rework and re-invoicing, **these removals must be reflected in RG-1.**

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### 3. **Documentation Required**

* **Proper Excise Invoice** should be issued for both:

* Removal of rejected goods.
* Removal of reworked goods.
* Maintain copies of **‘F’ forms** for inter-state transfers.
* Maintain a **separate register or note** for tracking such sale returns and reworked goods for audit and reconciliation.
* Keep records of **credit taken on rejected goods**.

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### 4. **Legal Provisions**

* Section 2(24) of the Central Excise Act defines **“Removal”** which includes goods cleared on invoice.
* Returns or rejection sent back are also treated as removals from the respective units and need to be recorded.
* Rule 11 of the Central Excise Rules requires maintaining **RG-1** as a **statutory register** for removals.

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### 5. **Best Practice Suggestion**

* Maintain a **separate sub-register or column in RG-1** for:

* Goods returned as rejected.
* Goods removed after rework.
* This will help in easy reconciliation and audit trail.

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### **Summary Table**

| Transaction | Document Required | RG-1 Entry Required? |
| -------------------------------- | ------------------------- | ---------------------------------------------- |
| Return of rejected goods | Excise Invoice + ‘F’ Form | Yes, on removal date |
| Removal of reworked goods | Excise Invoice + ‘F’ Form | Yes, on removal date |
| Removal "as such" without rework | Excise Invoice | Yes, unless physically removed without invoice |

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If you want, I can help draft sample formats for the **RG-1 entries** or a **separate tracking register** for sale returns and reworked goods. Would that help?

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