Accounting treatment of Discount offered on invoice

This query is : Resolved

RAJU CHANDAK (Querist)
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01 May 2009 what should be accounting treatment if goods are purchased with vat/cst and same amount of vat/cst is shown as discount in the same invoice.
For eg...
Basic Price 100
CST 3
Total 103
Less
Discount 3
Net 100
The discount is not in the nature of Cash discount.... We cannot treat this discount as trade discount as well.. as it comes after vat/cst calculation... Please let me know the repurcusion at the time of sale tax assessment.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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01 May 2009 Purchase price will remain same.
CST will reamin same.

The discount given by supplier has to be routed through accounts as follows.

Supplier A/c Dr
To discount received
(Being discount granted by the supplier)

RAJU CHANDAK

RAJU CHANDAK (Querist)
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01 May 2009 Consider CST rate being 2% agst provision of C Form to the party and discount is given is same way ... For what value C Form is read to be issued.....