Gst on turnover discount credit note
This query is : Resolved
15 December 2017
"A" is manufacturer and supply goods to "X" on wholesale price less Pre-defined Trade Discount & Cash Discount at time of supply and reduces the same in the TAX INVOICE itself and charged GST on reduced value of goods.
"X" made payment of the Invoice on due dates.
Subsequently based on the total supply of goods, "A" issue Credit Notes towards Discount called as Quantity Discount/Incentives etc. without mentioning any GST on the said value and paid through Cheque/DD/RTGS/NEFT to "X" or even allowed "X" to deduct the value of Credit Notes from future payables.
My Question is :
What is the treatement of this Credit Note in the hands of "A" as well as in the hand of "X" under GST Act?
Will “X” is liable to pay GST on Credit Note issued by “A” and reduce his ITC but in this case “A” is not ready to take the Input tax credit on Credit Note issued by him.
Is there any violation of GST law in it ? "A" has not reduced his GST Liability nor "X" has reversed ITC on account of such Credit Note. There is no impact of Revenue as well.
"X" made payment of the Invoice on due dates.
Subsequently based on the total supply of goods, "A" issue Credit Notes towards Discount called as Quantity Discount/Incentives etc. without mentioning any GST on the said value and paid through Cheque/DD/RTGS/NEFT to "X" or even allowed "X" to deduct the value of Credit Notes from future payables.
My Question is :
What is the treatement of this Credit Note in the hands of "A" as well as in the hand of "X" under GST Act?
Will “X” is liable to pay GST on Credit Note issued by “A” and reduce his ITC but in this case “A” is not ready to take the Input tax credit on Credit Note issued by him.
Is there any violation of GST law in it ? "A" has not reduced his GST Liability nor "X" has reversed ITC on account of such Credit Note. There is no impact of Revenue as well.
15 December 2017
No violation of GST law in it.
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