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Discount on vat sales

Manohar (Student ) (69 Points)

26 May 2016

if there's discount provided on vat sales. on which amount we need to charge vat (on amount before VAT or after VAT)

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4 Replies

CA Shubham Gupta (CA Job) (606 Points)
Replied 26 May 2016

if it is cash discount then on after vat value
if trade discount then on before vat value

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Manohar (Student ) (69 Points)
Replied 27 May 2016

Sir trade discount is given at the time of purchase it is directly reflected on the face of invoice so VAT will be obviously charged on the amount after discount.

Whereas in case of cash discount on the invoice discount is not shown that simply means vat will be charged on full amount and after that as per the terms discount will be given and adjusted through the ledger of the party.

Correct me if i'm wrong

Manohar (Student ) (69 Points)
Replied 27 May 2016

Sir trade discount is given at the time of purchase it is directly reflected on the face of invoice so VAT will be obviously charged on the amount after discount.

Correct me if i'm wrong

Manohar (Student ) (69 Points)
Replied 27 May 2016

So i think there's a possibility for evasion of tax here because u may give discount deliberatily and charge less vat that discount can be recovered in some other way.