Damaged stock record for shops
A damaged stock record for shops should show what was damaged, how much was affected, why it happened and what you eventually did with the goods. Separate unsaleable items from the shelf, preserve the evidence and record the correct stock movement once. This guide gives you a practical register, a worked example and checks for supplier returns and GST.
A damaged stock record for shops: what to include
Before a busy selling period, set-aside damaged goods can make the stock figure look healthier than the shelf.
Use a notebook or spreadsheet as a damaged stock register. The format below is a practical working record, not a prescribed government form.
| Field | What to record |
|---|---|
| Incident reference and date | A reference such as DMG-001 and the discovery date |
| Item and unit | Exact product, pack size, quantity and unit used in your stock records |
| Purchase reference | Supplier name and purchase invoice number; batch where relevant |
| Condition and cause | What you observed, such as a broken seal or water-damaged carton |
| Evidence | Photo filenames, delivery notes and supplier messages |
| Cost reference | Purchase cost and its basis, kept separate from selling price |
| Current status | Held for inspection, awaiting supplier response, returned or written off |
| Final action | Date, person who checked it and the linked stock or return entry |
Keep the original observation when adding the final outcome.
Separate the goods before changing the number
Move affected items to a clearly marked hold area so they cannot accidentally reach the counter. Count the damaged quantity in the same unit as the item record: three pieces and three boxes are very different reductions.
Photograph the condition and label the goods with the incident reference. Keep the supplier’s response alongside your note.
Then choose the appropriate route:
- Supplier return pending: track the goods on hold and confirm the return arrangement. A request for credit is not proof that credit has been granted.
- Confirmed write-off: record the quantity removed from usable stock and retain evidence of the decision and eventual disposal.
- Still under inspection: keep the status open. Do not describe the goods as destroyed while they are still awaiting a decision.
Goods held for return remain physically present until collected. Make that quantity visible separately when planning replenishment, even if the main stock figure still includes it. For a complete shelf reconciliation, use the physical stock count guide.
Worked example: six damaged mugs in Madurai
Consider a fictional homeware shop in Madurai. Meena checks one mug design and finds that the recorded stock is 48 pieces. Six are cracked, leaving 42 saleable pieces. All purchases and sales have already been entered.
The original purchase was an ordinary taxable supply from a Tamil Nadu supplier, delivered to her shop in Tamil Nadu. With the supplier location and place of supply in the same state, that purchase uses CGST and SGST, as explained in CBIC’s GST FAQ, question 85. The table below is only a stock-cost illustration; it does not calculate tax or a GST reversal.
Assume the recorded cost is ₹100 per mug, excluding GST, with no other cost components for this example. The supplier declines the return, and Meena approves a write-off with no recovery assumed.
| Stock position | Quantity | Cost per piece | Illustrative cost |
|---|---|---|---|
| Before the damage adjustment | 48 | ₹100 | ₹4,800 |
| Damaged quantity written off | 6 | ₹100 | ₹600 |
| Remaining saleable stock | 42 | ₹100 | ₹4,200 |
The quantity reconciles: 48 − 6 = 42. The cost reconciles too: ₹4,800 − ₹600 = ₹4,200.
Meena links the six-piece reduction to DMG-001 and retains the photographs and supplier response. She does not also enter a supplier return for those six mugs. If the supplier later offers compensation, she gives that correspondence to her accountant before recording the financial effect.
Record the stock adjustment in Yojika
For a confirmed damage write-off, Yojika provides a manual stock adjustment with a reason and note:
- Open the item and choose Adjust stock.
- Select Reduce and enter the damaged quantity in the correct unit.
- Choose Damaged as the reason.
- Add the incident reference in Note (optional) and select the appropriate date.
- Check the New stock preview before saving.
In Meena’s example, the preview should show 42 pieces. Check the saved movement in the item’s Stock history. Keep photographs and supplier correspondence in your own incident folder, linked by the note reference.
If the preview looks wrong, check pending purchases, sales and earlier adjustments before proceeding.
Keep the GST check separate from the quantity correction
Under Rule 56(2), regular GST-registered businesses must maintain stock accounts that include losses and write-offs alongside stock receipts, supplies and balances. The rule excludes persons paying tax under section 10 from this particular requirement. See CBIC’s published accounts and records rules.
Section 17(5)(h) restricts input tax credit for specified situations, including goods destroyed or written off. See section 17 of the CGST Act published by CBIC. A scratched item awaiting inspection, a supplier return and a completed write-off should not automatically receive identical treatment.
Give your CA the original purchase invoice, affected quantity, incident record and final outcome. Confirm the current rule with your CA, including whether credit already claimed needs reversing and how to report it. The ₹600 cost illustration above is not the amount of GST to reverse.
Frequently asked questions
What should I write in a damaged stock register?
Record the date, item, quantity and unit, purchase reference, damage reason, evidence reference and final action. Give each incident a reference so the stock adjustment and any supplier correspondence stay connected.
Should I reduce stock as soon as I spot damage?
Separate the goods immediately, then establish what happened and whether they will be returned or written off. Keep pending goods visible in a hold record and avoid recording both a damage reduction and a supplier-return reduction for the same quantity.
Does reducing stock in software settle the GST treatment?
No. A quantity adjustment does not by itself settle input-tax-credit treatment. Give your CA the purchase invoice and damage evidence to confirm the current rule and any required reversal.
Can Yojika record a damage adjustment?
Yes. Open the item’s Adjust stock action, choose Reduce, enter the quantity and select Damaged as the reason. Add an incident reference in the note and check the New stock preview before saving.
Keep each adjustment explainable
Yojika helps you record a stock reduction with its reason and review the item’s movement history. Explore the inventory features, or download Yojika to try the workflow with a sample item before using it for your shop’s records.