GST liability in case of line sale in Interstate

[Tikam Gupta]

Dear Team,

My friend is registered in Delhi state and he sells his products in Delhi and UP under the line sale concept. Actually, in Interstate sales (from Delhi to UP), he issued a single delivery challan along with an E-way bill (under-line sale) in the name of the vehicle Driver for the whole quantity. He prepares the E-way bill for the destination state (i.e UP) where he will sell the product. In such a case the actual recipient (customer) is unknown and when he will reach to UP, then, will approach to so many shopkeepers and sell the product according to their requirements. For this sale, he will issue an IGST invoice to each customer.

Please suggest, is this kind of operation model is fine in the eyes of law? or in the future, he can face any issues.

Please advice.

[Shilpi Jain]

There was a circular also in this regard. A DC is required to be generated and invoice to be generated at each sale. While the left out goods, if any, are returning back it has to be on a DC again.

[Tikam Gupta]

Dear Ms. Shilpi,

Thanks for your reply. Please share the circular number for more clarity.

Thanks.

AI Summary

Delivery challan requirement: generate a delivery challan and invoice for each sale in line-sale interstate transactions.
Interstate line-sale requires issuance of a delivery challan for movement and an invoice for each subsequent sale; returned unsold goods must be accompanied by a delivery challan, and failure to issue invoices at each sale or proper delivery challans for returns poses compliance risk.