Build the record around custody
Section 35(2) of the CGST Act imposes record obligations on transporters whether or not registered. Subject to Rule 56, Rule 58(4)(a) requires transport businesses to maintain, for each branch, records of goods transported, delivered and stored in transit, along with GSTINs of registered consignors and consignees. Keep a movement history even if no sale occurs during a branch handoff.
Read the applicable text: CGST Act: section 35 CGST Rules: 56 and 58.
Keep enrolment and custody distinct
Rule 58 provides for ENR-01 for persons covered by section 35(2) who are not already registered, subject to the rule and portal requirements. Check the enrolment position separately from record maintenance. Rule 58(1A) provides an ENR-02 route for eligible transporters registered in more than one State or Union territory with the same PAN to apply for a common enrolment number. Once that common enrolment number is obtained, Rule 58(1A) bars using any of the transporter’s GSTINs for Chapter XVI of the CGST Rules. That restriction concerns Chapter XVI transport documentation; it does not replace registered consignor or consignee GSTINs in branch records.
Create a shipment and branch bridge
Link dispatch document, shipment reference, goods and unit, original consignor and consignee, GSTIN where registered, branch intake, onward dispatch, proof of delivery and remaining quantity. For a vehicle transfer keep both branches' records and preserve one shipment ID. Attribute open stock to the location holding it and avoid counting both the transfer out and receipt as additional external goods.
Investigate exceptions with evidence
Use separate states for refused, returned, damaged and undelivered quantities. Match a split delivery to quantities actually accepted and identify the custody location for the remainder. A shortage is an exception to investigate; the quantity bridge does not determine tax treatment or who bears liability. Warehouse operators must review their separate Rule 58 requirements where applicable.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Partial delivery
A branch accepts 120 cartons and has evidence of 95 delivered. The open quantity is 25 cartons; label it by physical custody rather than as delivered.
Illustrative example 2: Handoff between branches
Branch A hands 70 of 100 cartons to branch B. A keeps 30 and B records 70 in custody; consolidated stock is 100, not 170.
Illustrative example 3: Rejected goods
A consignee accepts 44 of 50 units, refuses six and the branch returns four of those to the consignor. Two remain open and should be linked to the refusal and subsequent return evidence.
Illustrative example 4: Unexplained difference
Opening custody is 35 crates, additions 80, documented deliveries 70 and outward handoffs 20. Expected close is 25; the physical count of 23 leaves a shortage of two to investigate.
Illustrative example 5: Split consignment
Three vehicles carry 36, 44 and 20 bags under linked records. With proof of delivery for the first and third, 56 are delivered and 44 remain open.
Illustrative example 6: Missing party identifier
Of 48 consignments reviewed, 40 had two registered parties. The shipment review worksheet expects 80 party-ID fields for that group. With 76 verified, four fields remain exceptions; separately classify the other eight consignments.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify branches and operating roles | Branch master and contracts |
| 2 | Confirm registration and enrolment status | GSTIN or applicable enrolment evidence |
| 3 | Assign a persistent consignment ID | Dispatch and shipment references |
| 4 | Validate registered consignor and consignee GSTINs | Party data and dispatch document |
| 5 | Record receipt quantity and unit of measure | Branch intake record |
| 6 | Match every custody transfer to both branches | Transfer-out and intake evidence |
| 7 | Record proof of accepted quantities | Delivery confirmation |
| 8 | Separate refusal, return and damage records | Exception and return evidence |
| 9 | Reconcile expected and actual open goods | Quantity roll-forward and count |
| 10 | Retain branch-level exports and source documents | Review file with traceable shipment IDs |
Sixteen practitioner FAQs
1. Does the obligation apply to an unregistered transporter?
Section 35(2) expressly covers transporters whether registered or not.
2. Does GST enrolment remove the ledger requirement?
No. Enrolment and maintaining movement records are separate.
3. Is every carrier eligible for common enrolment?
Check the same-PAN and multiple-State or Union-territory registration conditions. A transporter that has obtained the common number uses it instead of its GSTINs for Chapter XVI.
4. Does an enrolment number replace both parties’ GSTINs?
No. Maintain registered consignor and consignee GSTIN information as required.
5. What if a party is unregistered?
Record identity and registration status; do not enter a fabricated GSTIN.
6. Does the record have to be branch-specific?
Rule 58(4)(a) refers to each branch. A central system should preserve branch-level evidence.
7. Can proof of vehicle arrival close the consignment?
Match it to evidence of accepted delivery; arrival alone does not establish acceptance of all goods.
8. How should a branch handoff be posted?
Link the release and receipt, retaining custody history without doubling consolidated stock.
9. What if a delivery is split over several days?
Record each accepted quantity and roll forward what remains open.
10. What if goods move between vehicles at the same branch?
Retain the vehicle and custody event against the same shipment.
11. Should a refused item remain shown as delivered?
Record the refusal and identify where the goods are held or when returned.
12. Do warehouse operators have a separate rule?
Yes. Rule 58(4)(b) and (5) address warehouse or godown records and stock identification.
13. Can a trip summary replace the consignment register?
Only use a design that preserves the required detail and links records to branch and parties.
14. What if the customer’s billing address differs from delivery?
Retain distinct identity and delivery fields and reconcile the actual movement.
15. Does a shortage in the ledger automatically establish tax due?
No. Investigate the facts, contract and applicable tax consequences separately.
16. Do e-way bills alone prove delivery?
They support transport documentation; obtain evidence of actual custody and delivery.