Example:
- 18
When
in the above Example Sahil Interior Ltd agreed to provide a further discount of
0.75% if ABC Interior makes payment by 31st of the month via net banking. .
Ans.
Discount
of 0.75% is not deducted in the invoice. As discount of 0.75% is given after the
supply, it will not be shown in the invoice. However, since the discount was
known at the time of supply, and can be linked to this specific invoice, the
discount amount can be reduced from the transaction value. For this, Sahil
Interior Ltd will issue a credit note according to section 34 of CGST Act to ABC Interior for Rs. 2,655 (0.75% of Rs.
3,00,000 = Rs. 2,250+ GST@ 18% on Rs. 2,250 = Rs. 405), and the same must be
linked to the relevant tax invoice.
Discount given after supply but agreed upon before or at the time of supply and
can be specifically linked to relevant invoices, can be deducted from the
transaction value and ITC of RS. 405 is reversed by ABC Interior.