Question is little bit vague. Can you please put it up again with the help of an example.
Also please confirm whether the third party involved in this transaction is the retailer for the FMCG company??
We are distributors of an FMCG company
We are Distributors of FMCG company and using company software. There is some money which is given by Company to retailers for their sales. When we cut the bill their amount gets deducted in the bill automatically in their first bill of the month. After submitting that amount in company software. After a month company tells us to make a bill in third-party name on HSN code 998599 and raise the bill with 18% tax. The Third-party remits us that money in next month. my query is is this accounting right. How this should be accounted.
Asked 6 years ago in GST
for example my firms name is SRI RAM TRADERS and i sell stocks to Rahul Traders worth 20000 rs , in the company software 6000 discount get cut. Then i claim this amount of rs 6000 from 3rd party in the name of oma in the hsn code mentioned above. The third party involved in this transaction is not retailer
Asked 6 years ago
First you are giving discount and then billing the same discount from the same person with GST @18% in the name of support services. Who is third party?. To whom you are selling and billing?. According to you, you are giving discount to rahul traders and billing the discount to 3rd party.
Thanks
According to me Discount is given to Rahul trader Bill of 6000 rs is made in the name of third party OMA INTERNATIONAL The fmcg company is telling us to make a bill in the name of OMA international so that we can get back the amount of 6000 which has been deducted in the bill of Rahul trader
Asked 6 years ago
Are Rahul traders and OMG International are related parties i.e. under the same management?
So you get 14000/- as payment feom retailer and 6000 + GST from FMCG company.
Hi,
Sorry it's not possible to answer your question until I get the detailed understanding of your question.
Who is oma interntaional? Did you sell any goods to oma interntaional.
If no, then it's definitely not a correct practice
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Query is unclear, I think usage of words have to proper.
Please ask the client to repost it with help of a friend who can communicate well in english.
I am a distributor of FMCG products Example Ram store has taken 1760 worth stocks from us We gave him 1760 rs credit note adjustment in the bill and we recive 0 rs in cash Then the FMCG company tells us to claim this amount from A third party who has no dealing with Ram Store We raise a bill in the name of the third party with a particular hsn code 998599 ( MARKETING ACTIVITY SUPPORT SERVICES 2017) FOR RS 1760 + 18% IGST =2076.8 The third party does the RTGS in our bank account after cutting the tds My question is How will i set of the expenses of payment received through the third party in my books of account SO THAT IT DOES GETS ADDED IN MY INCOME Is it required to take any document from Ram store for the credit adjustment done???
Asked 6 years ago
From your question, I understand that this is a scheme support offered by your FMCG company.
If you can co-relate the reimbursement of the expense product wise, please account it as Direct Income under the head "Scheme Support"
If you cannot co-relate it to the stocks sold by you, please account for the same as Incirect Income in your P&L A/c using the same line "Scheme Support"
Please take a document proof in the form of a letter on his letter head that he received the product free of cost as part of scheme announced by FMCG company. Please ensure you preserve the documentation accurately and pay your GST accurately on the sale value of the product.
Reposting as there are few typos:
From your question, I understand that this is a scheme support offered by your FMCG company.
If you can co-relate the reimbursement of the expense (invoice wise), please account it as Direct Income under the head "Scheme Support"
If you cannot co-relate it to the stocks sold by you, please account for the same as Indirect Income in your P&L A/c using the same head "Scheme Support"
Please take a document proof in the form of a letter on his letter head (RAM Store) that he received the product free of cost as part of scheme announced by FMCG company. Please ensure you maintain the documentation accurately and pay your GST accurately on the sale value of the product.
Do you charge GST on Sales made to Ram Store???
Obtain acknowledgement from ram store in the form of debit note and show income from om as indirect income.
The entire Transaction seems to be fishy. How can you raise a bill in the name of a third party whom you have not provided any service.
Hi
Sorry, your facts are not understood by me. Please contact someone personally to explain it in a better way.
Hi,
I am not comfortable with the way your company is making you do the accounts. You may fall into trouble because of such transactions.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Hello,
The transaction looks too shady on the face of it. Are all your transactions reversed using Credit Note ??
It will be pretty difficult to prove the chain in case you receive a notice from the department.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
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