Delivery challan for sales return

[Allauddin Patel]

While creating delivery challan for sales return do we need not to select gst rate in delivery challan and while creating e way bill too ??

[Raam Srinivasan Swaminathan Kalpathi]

Rule 55 of CGST Rules provides for transportation of goods without issue of invoice. The details to be included in the DC are as provided therein, viz.,

(i) date and number of the delivery challan;

(ii) name, address and Goods and Services Tax Identification Number of the consigner, if registered;

(iii) name, address and Goods and Services Tax Identification Number or Unique Identity Number of the consignee, if registered;

(iv) Harmonised System of Nomenclature code and description of goods;

(v) quantity (provisional, where the exact quantity being supplied is not known);

(vi) taxable value;

(vii) tax rate and tax amount - central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee;

(viii) place of supply, in case of inter-State movement; and

(ix) signature.

EWB is generated as per Rule 138 and has the following fields -

E-way bill field	What to enter for a sales return
Transaction type	Inward
Sub-type	Sales Return
Document type	Delivery Challan, where applicable
Document number	Number of the delivery challan accompanying the returned goods
Document date	Date of the delivery challan
From	Customer's dispatch location and GSTIN, if registered
To	Original supplier's receiving location and GSTIN
Value of goods	Value declared for the returned consignment, consistent with the supporting document
HSN code	Applicable HSN code for the goods
Reason for transportation	Sales Return
Transport details	Transporter ID/document number and vehicle details, as applicable

[KASTURI SETHI]

It is mandatory.

[Allauddin Patel]

My question is

I sold goods to registered customer, after recieving goods customer said quality is bad so take these goods back . So when i taking goods back to my premises i need to create delivery challan for the movement of goods, in that delivery challan do i need to mention tax cgst sgst or not, because delivery challan other than supply .

[Raam Srinivasan Swaminathan Kalpathi]

Dear Querist

Request you to read the reply fully before posting another repetitive query. Rule 55(1)(d)(vii) clearly mentions thus:

(vii) tax rate and tax amount - central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee;

In your query there is no supply. That being the case where is the question of mentioning the tax rate and tax amount?

[KASTURI SETHI]

Rule 55 (3) is to be read with Rule 138 of CGST Rules, 2017.

[KASTURI SETHI]

The ultimate purpose is to correlate delivery challan with Original Invoice of the supplier. If you mention the particulars as required under Rule 138 in delivery challan, it will be convenient for you at the time of Audit. Moreover, it is safe from all aspects.

[KASTURI SETHI]

For identification of the sales-returned goods in transit as well as in the factor premises, complete particulars are to be described in the delivery challan.

[Shilpi Jain]

Rule 55 states that the tax rate is required only if its a supply

(vii) tax rate and tax amount - central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee;

In case of return of goods its not a supply so rate of tax not required

[KASTURI SETHI]

Relevant extract of CBIC Circular No. 137/07/2020-GST (issued on April 13, 2020)

2. Goods Supplied but Rejected / Returned (Sales Return)

• Issue: Goods were delivered under an invoice, but the buyer completely or partially rejected them and returned them to the supplier.

• Clarification:

  • The supplier can issue a Credit Note under Section 34 to adjust the original tax liability.

  • For moving the returned goods back from the recipient's premises to the supplier, the movement can occur under the cover of a Delivery Challan (Rule 55) or an e-Way Bill (where applicable, selecting the reason for transport as "Sales Return"), cross-referencing the original invoice details.

AI Summary

Sales-return delivery challans need not state tax rate when returned goods are transported otherwise than for supply.
Returned goods may be transported from the recipient to the supplier under a delivery challan and, where applicable, an e-way bill marked as "Sales Return", with reference to the original invoice. The delivery challan must contain prescribed identification, party, goods, value, place-of-supply and signature particulars. Tax rate and tax amount are required only where goods are transported for supply to the consignee; they need not be stated for a sales return. Complete particulars support identification of the returned goods and invoice correlation.