Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 19-1-2018 – Sale on approval Sale on Approval is a business arrangement wherein an individual or company who is interested in purchasing a specific item is allowed to use the item for a given length of time. At the end of that time, if the individual is satisfied with the item, they agree to purchase it. However, if the individual is unsatisfied for any reason, they are allowed to return the item and are not committed to purchasing it. Supply on approval basis The GST does provide for supply of goods or services or both. No sale is involved. Title as well as possession both has to be transferred for a transaction to be considered as a supply of goods. In case title is not t
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turned within six months from 01.07.2017 (i.e., 31.12.2017). The said period of six months may be extended by the Commissioner for a further period not exceeding two months on sufficient cause. The tax shall be payable by the person returning the goods if such goods are liable to tax under this Act and are returned after a period specified in this section. Likewise the tax shall be payable by the person who has sent the goods on approval basis are liable to pay tax under this Act and are not returned within a period specified in section 142(12). Issues in goods sent approval basis There are various issued involved in goods sent for approval basis. For example the suppliers of jewellery who registered in one State are to visit to other State
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ubject, the clarified the above issue for the purpose of uniformity in the implementation of the Act. The circular analyzed the provisions of Rule 55. Rule 55(1)(c) of Central Goods and Services Tax Rules, 2017 provides that the supplier shall issue a delivery challan for the initial transportation of goods where such transportation is for reasons other than by way of supply. Rule 55(3) provides that the said delivery challan shall be declared as specified in Rule 138. Rule 55(4) provides that where the goods being transported are for the purpose of supply to the recipient but the tax invoice could not be issued at the time of removal of goods for the purpose of supply, the supplier shall issue a tax invoice after delivery of goods. The Cir
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