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GST Levy on Cash Discount(CD)

This query is : Resolved 
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(Querist)
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.
I have elaborated my query with example - Suppose we have raise a Invoice of Rs. 20,00,000/- (Incl. of Tax) to a party and such party made a payment of Rs. 19,60,000/- after deducting Cash Discount of Rs. 40,000/- now Rs. 40000/- in our books is still outstanding
Now i want to know ,
i) Can we raise Credit note of Rs. 40000/-(Incl. of GST) & whether Customer need to reverse the GST Amount on Rs. 40000/-
ii) Any other option like Discount & GST implication on such Discount.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
25 March 2022 GST not applicable on cash discount.
Raise credit note without GST. No need for reversal of GST.
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Sanchit

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Sanchit (Querist)
26 March 2022 Sir,
Whether we can show Discount in Sales (reducing the Sales) or we will have to show as indirect expense.
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CA Altamush Zafar

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CA Altamush Zafar (Expert)
29 March 2022 Both treatments can be taken. Better to show as reduction of sales
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