14 May 2018
A dealer gives cash discount on its invoice as per direction of company.The cash discount so given is reimbursed by the company later.In such scenario the cash discount will be charged before charging gst or after charging gst?The dealer gives discount after charging gst in order to higher tax compliance and does not reduce the gst on reimbursement so received from the company.Is the practice is correct or not?
14 May 2018
To my understanding, there are two independent transactions. One from company to dealer and another from dealer to consumer. When the company is selling goods to the dealer, it would charge as per agreed price. As discount is not quantified at that time, GST would be payable on full transaction value. Further, when the dealer is selling to the consumer, the discount is known and it is specifically brought out in invoice - in that case GST would not be payable on discount value. Please refer section 15 of CGST Act.
15 May 2018
Discount given at the time of supply by distributor to retailer,billing made as value--100000 cgst-2500,sgst-2500 total value-105000.00 less discount--10,000.00 Net invoice value--95,000.00.The discount so given is reimbursed by the manufacturer to the distributor.Is the billing process is correct?
CAclubindia
