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REGARDING PURCHASE VALUE

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This query is : Resolved

ABHI KUMAR (Querist)

20 May 2026 PURCHASE TAXABLE VALUE OF PRODUCT 5000
TAX 200
INVOICE AMOUNT 6200
DISCOUNT 6200
INVOICE VALUE NILL
“Will this taxable value of 5000 be shown in purchases? And then, will the final discount be shown in indirect income, or will the purchase value directly become zero in trading? Thanks in advance.”

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

20 May 2026 Trade Discounts: Subtract from the base price before recording. Record the purchase at the net amount. Result: No entry in Indirect Income. Financial/Cash Discounts: Record the full invoice amount as a Purchase (Expense). Record the discount amount as an Indirect Income (Discount Received). Result: Your net expense remains correct, and the P&L reflects the income.GST Compliance: Ensure any discount reducing your taxable value is documented correctly via a credit note or on the original invoice, as per GST Section 15(3), to ensure your Input Tax Credit (ITC) matches the actual value paid.

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