The types of post-supply discounts that are usually offered in the business environment are revenue reductions as follows and the accounts are processed in the same market. The discount should not be permanent, as the offer of a discount margin would mean that the discount rate to be offered would remain at the discretion of the supplier. Post-sale discounts can be divided into 3 categories – No GST on discounts if indicated in the invoice. If the invoice does not reflect the account but is provided retrospectively, gst is not deductible. In my experience, discounts on turnover are declared during the contract/order. There is no element of tension as to the amounts or percentages of reduction allowed for the achievement of a given turnover or for different turnover disks. To conclude: the treatment of the rebate in the books of the supplier and the recipient depends on the conditions under which such a discount was granted. One of the important points to consider is whether or not the discount was agreed upon at the time of sale. Basis of this article – Action plan for the elaboration of a clause concerning the discount after delivery in an agreement concluded on the date or before delivery Section 15 (3) of the CGST Act 2017 deals with the deduction of the discount granted by the supplier of goods / services to the recipient of the taxable value of the delivery of goods / services. The treatment of GST depends on the type of discount that we will now see in detail.
In the usual practice, product manufacturers grant their dealers a year-end discount on the basis of their performance during the financial year, as regards the quantity of goods they sell to retailers and final consumers. There is no agreement between the ABC Ltd. provider and the recipient for the account, but if ABC LTD funds are urgently needed, it authorizes the account and issues credit for the account plus GST. Does the GST have to be cancelled for this occasional account? Authorizing the account is not a normal phenomenon. In addition, what will be the position in the case of a discount on the authorized turnover six monthly.by ABC Ltd. In this case, ABC Ltd would have to issue a credit on the amount of the discount plus the GST. discounts granted before or at the time of sale may be deducted from the transaction value at the time of sale; No GST is taken from it. However, these discounts must be indicated on the tax invoice. Example 1 – Mr. X sells goods to Mr. Y worth Rs 50,000 and gives Rs 1000 discounts for cash payment.
The current GST is 18%. Transaction value and GST are calculated as follows, but it can be easy for companies to adhere to certain principles when designing agreements to be made with their customers for the provision of goods/services.. . . .