Discount treatment in GST

This query is : Resolved

zareena (Querist)
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20 February 2023 Hi Sir/Madam,

After purchasing of the stock our supplier issues the schemes on sale like Rs.1000/- or 2000/- on each product. They had given 8% margin at the time of invoicing and the same margin 8% has deducted in issuing the credit note.
For example:
Market Operating Price: 9999
Basic Price: 8928
Margin 8% : 714
Invoice Price is ( 9999-714 ) = 9285 ( inclusive of gst)

Scheme issued 1000/- for each product then the calculation as given under
Scheme amount = 1000
Basic : 847.45
Margin 8% : 67.79
Credit not given : 932 ( 1000-67.79) inclusive of gst

Target linked credit note: They said you achieve the target on purchase then get additional 1%
calculation as under.
Total Purchase : 1,00,00,000 (Incl.Gst)
Base value :84,74,576/-
Gst @ 18% : 15,25,423/-
1% Calculated on Base value : 84,745/-
They are given the credit note 84,745/- inclusive of gst

Please suggest the above calculation is correct....

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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21 February 2023 Not right it should be (credit note) 84,745 Plus GST.

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