Goods Sent on Approval Basis Section 31(7) - GST Ready Reckoner - GST

Goods Sent On Approval Basis As per Section 31(7 ) Where the goods being sent on approval are removed before the supply takes place, the invoice shall be issued a) before or at the time of supply, or b) six months from the date of removal, whichever is earlier. Thus, the tax invoice must be issued within six months from removal . Goods can be removed on an approval basis within the State or outside the State. Delivery Challan should be issued at the time of removal of goods. E-way bills will also be issued wherever applicable. The person carrying goods for such a supply can carry the invoice book so that he can issue the invoice once the supply is made. Example :- Mr. Ramesh, a registered person supplies goods on approval for sale or return basis as on 5/5/2023 of worth Rs. 75000 to mr. sagar with option of return within 2 month. As on 15/06/2023 Mr. Sagar signifies his approval for the entire of goods. In this case Mr. Ramesh required to issue a invoice as per section 31(7) of CGST Act a) before or at the time of supply, (i.e. 15/06/2023) or b) six months from the date of removal, (i.e. 05/11/2023 ) whichever is earlier. (i.e 15/06/2023) Important Notification Circulars Clarification on issues wherein the goods are moved within the State or from the State of registration to another State for supply on approval basis . [ Circular No. 10/10/2017-GST dated 18-10-2017 ] Clarification in respect of goods sent/taken out of India for exhibition or on consignment basis for export promotion . [ Circular No. 108/27/2019-GST dated 18.07.2019 ] Whether any records are required to be maintained by registered person for sending / taking specified goods out of India? What is the documentation required for sending / taking the specified goods out of India? When is the supply of specified goods sent / taken out of India said to take place? Whether invoice is required to be issued when the specified goods sent / taken out of India are not brought back, either fully or partially, within the stipulated period? Whether the refund claims can be preferred in respect of specified goods sent / taken out of India but not brought back?