Bank Discount in Office Purchase

Nowadays, most office items such as laptops, subscripttions, stationery, and gifts are purchased through e-commerce sites. Amazon and Flipkart are the major e-commerce platforms where we buy high-value items using staff credit cards. Most of the time, they run instant discount offers, which we take advantage of. We reimburse the actual debited amount to the staff, but the bill will show the due amount in the books. The seller does not mention the instant discount value the bill.

In this case, can we claim ITC for such purchases? How should we record the instant bank discount in the books, and how should we close the due bills in the books?

Replies (1)

 

To address your questions: 

1. *ITC Claim*: You can claim ITC on the purchases, but ensure you meet the GST compliance requirements. Since the seller doesn't mention the instant discount value on the bill, you may need to obtain a debit note or a credit note from the seller to claim ITC on the discounted amount.

 2. *Recording instant discount*: Record the instant discount as a deduction from the purchase value in your books. .

For example: -.

Purchase value (bill amount): ₹100 - Instant discount: ₹10 - Net purchase value (after discount): ₹90 - Debit: Purchases ₹90 - Credit: Bank ₹100 - Debit: Discount Received ₹10

3. *Closing due bills*: When closing the due bills in your books, ensure you account for the discount received. 

You can either: - 

Settle the due bill amount (₹100) and then pass a journal entry to account for the discount received (₹10). - Directly settle the net purchase value (₹90) and close the due bill. 

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