documents necessary for goods sent for trial/demo

[VIGNESH]

sir. Goods were sent on demo/trial from and were accompanied with DC & Eway bill but officer demands Tax invoice! and levied penalty. what to be done ? is the officer correct? any provisions for my defence available with case law if taken for appeal.

[Amit Agrawal]

Rule 55 of the CGST Rules, 2017 specifically allows 'Transportation of goods without issue of invoice' in specified circumstances (including 'transportation of goods for reasons other than by way of supply').

Depending upon contents of notice / SCN / Order (factual position is not clear), you can provide reasons along-with supporting evidences to prove exception so provided u/r 55.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

Correction in my last post:- Querist indeed talked about appeal in his query.

Depending upon submissions made till date, contents of SCN and order (including provisions used to levy penalty etc.) & son on, appeal needs to be drafted. In this content, rule 55 is quoted & explained in brief in my earlier post.

In case of doubt, help / assistance from an expert should be taken in drafting the appeal memorandum who will go through entire case-papers and come with best defence/s in given factual situation.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[VIGNESH]

Thank u sir for your valuable reply! as mentioned can u share the details of the earlier post once again, iam not able to catch the same.

[Amit Agrawal]

Rule 55 of the CGST Rules, 2017 specifically allows 'Transportation of goods without issue of invoice' in specified circumstances (including 'transportation of goods for reasons other than by way of supply').

[Padmanathan KV]

There is no requirement in GST law that every movement of goods have to be accompanied by Tax Invoice. In other words, only where outward supply of goods takes place, tax invoice needs to be issued.

When goods are sent for demo/trial, it is not an outward supply of goods. In such scenario, the GST law provides for Delivery Challan to be raised in Rule 55. The same is reproduced as below:

55. Transportation of goods without issue of invoice.-

(1) For the purposes of-

(a) supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known,

(b) transportation of goods for job work,

(c) transportation of goods for reasons other than by way of supply, or

(d) such other supplies as may be notified by the Board,

the consigner may issue a delivery challan, serially numbered not exceeding sixteen characters, in one or multiple series, in lieu of invoice at the time of removal of goods for transportation, containing the following details, namely:-

xxx

This provision maybe highlighted in the appeal, along with factual position and also documentation regarding the demo/trial i.e. any e-mail communication, confirmation from other party etc. to prove that it was infact only for demo/trial purpose and not for outward supply.

[Prakash and Thiagarajan]

Sir, Is there any time limit to receive back the goods sent on trial?

[Prakash and Thiagarajan]

Sir, Is there any time limit to receive back the goods sent for trial?

AI Summary

Transportation without invoice permitted under Rule 55; delivery challan suffices for demo/trial when supported by evidence.
Officer demanded a tax invoice and imposed penalty despite goods being sent for demo/trial with a delivery challan and e way bill. The GST regime permits transportation without issue of invoice for movements not constituting supply; a delivery challan in lieu of an invoice is the operative document. Contesting the demand requires presenting the delivery challan and supporting evidence showing the demo/trial purpose and non supply, and framing these facts in the appeal memorandum.