Collection of Tax in Invoice

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This discussion clarifies how to correctly collect GST on invoices when discounts are involved. The key principle is that GST should be charged on the net amount after any applicable discounts have been deducted, provided these discounts are provided before or at the time of supply and are clearly stated on the invoice.

SUDHEEP M

SUDHEEP M (Querist)
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21 September 2021 Sir,

What was the correct method as per GST to collect tax in GST Invoice. Whether Tax should be collected for the net amount after deduction of discount or tax should be collected on the gross amount if discounts are shown separately in the invoice.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 September 2021 If the discounts are given before the time of supply & stated differently in the invoice, then GST should be charged over net amount after deduction of discount.

Udaya Chandran

Udaya Chandran (Expert)
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21 September 2021 If the discounts are given before or at the time of supply and shown in the invoice, then GST shall be paid on the taxable value after deducting such discount.

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