Reconciliation of Eway bills

[Komal Agarwal]

We are dealing in fabric from Gujarat and selling goods at Rajasthan and Haryana. While making sale invoice we generate E-way bill. Sometimes the customers return the goods without pre information to us. We come to know about sale return on receiving of goods on our door step. Thereafter we generate credit note for sale return without E-way bill. Customers do not generate Eway bills at the time of sales return. We have not been caught by GST officials while moving goods return. Now the GST department issued notice in DRC-01A for FY 2019-20 for difference of GSTR-1 and Eway bill. What to reply? What are the penalty provisions?

[Padmanathan KV]

You can explain the difference between GSTR-1 and E-way Bill being sales returns in your reply. As documentary evidence, you can produce the copy of credit note and sales register along with audited financial statements where the actual sales turnover is reflected.
 

[Shilpi Jain]

Ideally the customer is required to generate the delivery challan and the EWB on that.

There is no requirement of issuance of of credit note at the time of initiation of the movement of goods from the customer

[Shilpi Jain]

Also there is no requirement of generating EWB with the credit note as a basis in case of sales returns.

This view is supported by a decision of a HC

[Ravikumar Doddi]

TMI case law ID 442057

MADRAS HIGH COURT

LUMINOUS POWER TECHNOLOGIES PRIVATE LIMITED, REPRESENTED BY RAM CHANDER YADAV VERSUS STATE TAX OFFICER, DEPUTY STATE TAX OFFICER - 2023 (8) TMI 1036 - MADRAS HIGH COURT

AI Summary

E-way bill reconciliation: explain differences as sales returns and furnish credit notes and sales records to reconcile GSTR-1.
Discrepancies between GSTR-1 and e-way bill records due to customer-initiated sales returns should be explained as sales returns supported by credit notes, the sales return register and audited financial statements. The consignee is responsible for generating the delivery challan and e-way bill when returning goods; there is no requirement to issue a credit note at movement initiation or to generate an e-way bill based on a credit note.