GST Implications on Cash Discount

This query is : Resolved

Sanchit (Querist)
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25 March 2022 Dear Sir,
We have raised some invoices to few Parties on one condition that on receiving the Invoice & Material, they will make the payment after deduction of Cash Discount. But this Condition was not disclosed in the invoices raised to the above parties. Now, I want to know for Balancing the Ledger of such parties i need to raise Credit Note but What will be the GST Implications on such Credit Notes.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 March 2022 It's cash discount no GST impact.

CA Puja Sharma

CA Puja Sharma (Expert)
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25 March 2022 Yes GST cannot be reversed against cash discount.
You have to issue Financial Credit Note and not GST credit note.

Sanchit

Sanchit (Querist)
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26 March 2022 Sir/Mam,
Whether we can show Discount in Sales (reducing the Sales) or
we will have to show discount allowed as indirect expense.

Sanchit

Sanchit (Querist)
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26 March 2022 Sir/Mam,
Whether we can show Discount in Sales (reducing the Sales) or
we will have to show discount allowed as indirect expense.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 March 2022 This being cash discount show it as indirect expenses.

Sanchit

Sanchit (Querist)
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28 March 2022 Sir, then it need to be shown in GST return as we have raised credit notes or not and if not then how to reconcile sales figure on GST portal and books

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 March 2022 It's financial credit note without GST need not be shown in GST return. So no reconciliation problem.

CA Altamush Zafar

CA Altamush Zafar (Expert)
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29 March 2022 You will not decrease your GST liability through credit notes for cash discounts. Therefore such credit notes will not get reflected in your GST returns

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