Account cash backs to customers

Hello Experts,

We are a small partnership firm with decent sales and very less overheads. We are primarily involved in sales and we have lot of requests from our customers to pass on the benfit to them.

We get a commission of 2% for each sale and customers expect 1% back for buying through us. This is a win-win situation for everyone including the seller.

I'm wondering on what would be the best practice to account this outgoing cash flow to the customer. How would TDS work in this scenario and should we treat the customer as a contractor or anything else.. or are there other ways to handle this scenario.

Your expert advice is highly appreciated. 

Thank you for your valuable time.

Abiz

Replies (2)

Hi, The simplest and uncomplicated way out is to reduce the Sales price for all future sales. And for already made Sales, issue Cash Discount, no question of TDS for passing Cash Discount through Credit Notes.

Regards Pradeep S

Thank you for the response Pradeep.

 

We do not hold stock / inventory of the product and we are not supposed to reduce the sales price per our agreeement with the seller. Say the cost of product is 50,000, we can negotiate a price for the customer to 45000. We get paid 2% of 45K and in which we 1% of 45K goes to the customer who bought the product.

I hope I've stated it clear

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 11 September 2026
Audit Executive

RBSM Corporate Advisors Private Limited

Pune

CA

View Details
Company
08 September 2026
Semi-Qualified Assitant

Subrahmanyam & Sivudu CA Firm

Hyderabad

CA Inter

View Details
Company
ARTICLESHIP 29 August 2026
Article Assistant

RRPM & ASSOCIATES LLP

Chennai

CA Inter

View Details
Company
28 August 2026
Assistant Manager

NRS AND ASSOCIATES

Kozhikode

CA Inter

View Details
Company
ARTICLESHIP 01 September 2026
Article Assistant

SGNG & Associates

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 26 August 2026
Article Assistant

ANIVESH CONSULTANTS LLP

Gurgaon

CA Inter

View Details
Company
21 August 2026
Finance Manager

Resollect Technologies Pvt Ltd

Mumbai

CA

View Details
Company
ARTICLESHIP 16 September 2026
Article Assistant

MANUJ SHARMA AND COMPANY

Noida

CA Inter

View Details