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Accounting treatment of Discount offered on invoice (Accounts)

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This query is : Resolved



( Author )
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

( Expert )
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

( Author )
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.....


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