Applicability- Form F

[Guest]

Hii,

Background: A Spectacle lenses manufacturing company is having manufacturing unit in Mumbai and sales office in Cochin. so manufactured stock is being transferred to Cochin and from there it is sold to customer. In this case Cochin branch (being a receiving branch) is issuing Form F to Mumbai unit).

Now when sales returns are happening, return lenses are accepted at Cochin branch and same is being sent to Mumbai unit for quality check and approval through courier along with the Sales return form and stock is being accounted in the system only when Credit Note entry is passed by the Mumbai- HO.

Issue:

1) Whether, sending of sales return lenses back to Mumbai unit for quality check would be considered as a stock Transfer?

2) Whether, Mumbai branch (being a receiving unit for sales return lenses) is supposed to issue 'form F' to Cochin branch?

Regards,

Vilasini Daripdar

[YAGAY andSUN]

Dear Vilasini,

The reply to your queries is "YES".

Regards,

SameerMalhotra- Consultant

(YAGAY and SUN - Management, Business and Indirect Tax Consultants)

AI Summary

Stock transfer: returned goods sent for quality check treated as stock transfer requiring Form F issuance. Sending returned spectacle lenses from the Cochin sales branch back to the Mumbai manufacturing unit for quality check is characterized as an interbranch stock transfer; the receiving Mumbai branch is obliged to follow stock-transfer documentation and issue Form F to the Cochin branch, and accounting recognition upon head-office credit-note does not alter that characterization or the documentation obligation.