treatment of cash discount
This query is : Resolved
23 August 2009
Whether cash discount is deducted for making valuation under Central Excise Act, 1944.
what will happen if company deducts discount after charging excise duty in its Invoice?
what will happen if company deducts discount after charging excise duty in its Invoice?
05 September 2009
FIRST OF ALL WE MUST UNDER STAND THAT
CASH DISCOUNT IS DEDUCTED BY THE CUSTOMER FOR MAKING PROMPT PAYMENT. SUCH PAYMENTS ARE ALWAYS MADE ON THE BASIS OF INVOICES RAISED BY THE SUPPLIER, ie SAID DISCOUNT IS AN ACT OF POST SUPPLY.
THERE IS NO NEED TO MENTION / SHOWN CASH DISCOUNT IN THE INVOICE IT SELF.AS IT IS NOT KNOWN AT THE TIME OF SUPPLY THAT WHETHER CUSTOMER IS GOING TO MAKE PROMPT PAYMENT OR NOT.
AFTER GETTING PAYMENT, SUPPLIER CAN ISSUE CREDIT NOTE TO THE CUSTOMER FOR THE VALUE OF CASH DISCOUNT .
CASH DISCOUNT IS DEDUCTED BY THE CUSTOMER FOR MAKING PROMPT PAYMENT. SUCH PAYMENTS ARE ALWAYS MADE ON THE BASIS OF INVOICES RAISED BY THE SUPPLIER, ie SAID DISCOUNT IS AN ACT OF POST SUPPLY.
THERE IS NO NEED TO MENTION / SHOWN CASH DISCOUNT IN THE INVOICE IT SELF.AS IT IS NOT KNOWN AT THE TIME OF SUPPLY THAT WHETHER CUSTOMER IS GOING TO MAKE PROMPT PAYMENT OR NOT.
AFTER GETTING PAYMENT, SUPPLIER CAN ISSUE CREDIT NOTE TO THE CUSTOMER FOR THE VALUE OF CASH DISCOUNT .
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