• 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 2 years ago in GST

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??

Brijendra Tripathi
CA, Gurgaon
124 Answers
3 Consultations

5.0 on 5.0

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

Vivek Kumar Arora
CA, Delhi
3800 Answers
242 Consultations

5.0 on 5.0

Are Rahul traders and OMG International are related parties i.e. under the same management?

Vivek Kumar Arora
CA, Delhi
3800 Answers
242 Consultations

5.0 on 5.0

So you get 14000/- as payment feom retailer and 6000 + GST from FMCG company.

Brijendra Tripathi
CA, Gurgaon
124 Answers
3 Consultations

5.0 on 5.0

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

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

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.

Vishal Mudumba
CA, Vijayawada
15 Answers
2 Consultations

5.0 on 5.0

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.

Vishal Mudumba
CA, Vijayawada
15 Answers
2 Consultations

5.0 on 5.0

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.

Vishal Mudumba
CA, Vijayawada
15 Answers
2 Consultations

5.0 on 5.0

Do you charge GST on Sales made to Ram Store???

Brijendra Tripathi
CA, Gurgaon
124 Answers
3 Consultations

5.0 on 5.0

Obtain acknowledgement from ram store in the form of debit note and show income from om as indirect income.

Vivek Kumar Arora
CA, Delhi
3800 Answers
242 Consultations

5.0 on 5.0

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.

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hi

Sorry, your facts are not understood by me. Please contact someone personally to explain it in a better way.

Lakshita Bhandari
CA, Mumbai
5245 Answers
351 Consultations

5.0 on 5.0

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

Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
27 Consultations

5.0 on 5.0

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

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

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