While auditing i found that , HO sales goods to its branches through a sales tax invoice and records sales and branch records purchase.
At year end the stock which is unsold at year end at branch level is sent back to HO for that they make sales tax invoice to HO and record it as sales and HO records it as purchase. Is this treatment correct?? In my opinion HO should make credit note for the same and record it as sale return whereas branch should record it as purchase return !!!
can you tell me correct treatment for BS AS WELL AS GST PURPOSE.??
note : HO and branch are in different states
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Purchase return recorded as sales in Books of accounts.
Replies (1)
Under the GST REGIME, THERE ARE SOME DRASTIC CHANGES.
THERE ARE SOME ISSÙES WHICH COULD HV BEEN REMOVED.
1. RECORDING BRANCH SALES FOR STOCK SENT TO HO IS NOT TREATED AS TRANSFER AS MADE PREVIOUSLY.
BUT SEPERATE DISCLOSURES ARE MADE IN BRANCH BOOKS AND HO BOOKS.
WHILE CONSOLIDATION THE ENTIRE STOCK IS SHOWN IN BALANCE SHEET AT COST OR MARKET WHICHEVER IS LOWER.
THERE ARE SOME ISSÙES WHICH COULD HV BEEN REMOVED.
1. RECORDING BRANCH SALES FOR STOCK SENT TO HO IS NOT TREATED AS TRANSFER AS MADE PREVIOUSLY.
BUT SEPERATE DISCLOSURES ARE MADE IN BRANCH BOOKS AND HO BOOKS.
WHILE CONSOLIDATION THE ENTIRE STOCK IS SHOWN IN BALANCE SHEET AT COST OR MARKET WHICHEVER IS LOWER.
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