eShopbox Partner Care

This guide will give you outline of accounting methodology to be followed in case of brands working on consignment model. This will be done by explaining the accounting impact of following events :

• Supply of Goods to eshopbox warehouse
• Monthly settlement and payment
• Return of goods to Brand 

As a prerequisite to work on consignment model, 

• Brand needs to have GST registration in the state and 

• Add eshopbox warehouse as additional place of business.
  
  

1. Supply of goods to eshopbox :

In consignment model of working,  eshopbox warehouse is registered as additional place of business for Brand.  So, while sending goods to eshopbox warehouse, it is treated as stock transfer from Brand’s one warehouse to other.  

There is no entry corresponding to this event in the books of accounts of eshopbox.  Eshopbox will only provide an acknowledgement of actual goods received (GRN report) when the inventory is inbounded into eshopbox warehouse. Eshopbox will also notify if it finds any discrepancy in physically received items when compared with expected items to be received. 

2. Monthly payment and invoicing 

Goods are virtually supplied to eshopbox when the order is received. This can be considered as continuous supply and invoice can be raised monthly before before receiving the payment for the goods sold in previous calendar month.  (Please refer to section : Continuous supply of goods on link : https://cleartax.in/s/time-limit-to-issue-invoices-under-gst/)

The billing value of goods of this invoice is determined using methodology outlined in below table for apparels category. 

Table 1 : Billing value calculation 

You can read more about billing value calculation here : Billing value calculation 

• The invoice raised should comply with the GST invoice guidelines.  (refer : Invoicing Guidelines)

• Brand should include this invoice in the GSTR-1 returns filed for the month of supply. The GST deposited by brand will added back in the monthly payment made to brand corresponding to sales of previous calendar month.

Payment for net goods sold in previous calendar month is calculated as explained in the settlement value calculation table below :

Settlement value = order item value - channel fees - reimbursement of sales tax - eshopbox fees + input GST credit 

• Please note fees (channel or eshopbox) mentioned in the above table is for explanatory purpose.  You can find details on how channel fees and eshopbox fees in the corresponding section. 

• Kindly notice the input gst credits (highlighted in yellow) received by eshopbox at the time of supplying the goods are added back in the payments. 

• Also input credits of GST charged by channels over channel fees will be passed on to brands while calculating reimbursement of taxes in an B2C channel like Flipkart, Amazon etc. 

• Difference in billing value and settlement value will be adjusted by brand issuing eshopbox a corresponding credit note / debit note.  This is done only to square of the accounts and no reversal / addition of GST is done corresponding to this credit note / debit note. This is because this adjustment is corresponding to discounts and fees not known at the time of supply and can’t be traced back to relevant tax invoice.( Read more at https://cleartax.in/s/valuation-supply-gst-discount)

3. Return of inventory to brand :

This is event in case there is inventory is removed from eshopbox warehouse and supplied back to Brand. This can happen for various reasons - goods remain unsold, some pieces were rejected at the time Quality check during inbound,  goods returns by customer and which needs refurbishment etc. 

This will be again treated as stock transfer (as point 1 : Supply of goods) from Brands one warehouse to other warehouse. There is no entry corresponding to this event in the books of accounts of eshopbox.