Credit Note

Discount given after the supply has been effected

These discounts are generally of the nature of periodical turnover/volume discounts or incentives, allowed for buying a particular value of goods/services during a period.

Such discounts will be allowed as deduction from the value of supply only if the following conditions are satisfied:

1. There must be written contract between the supplier and the buyer, prior to making the supply, which should mention the amount of discount to be given.

2. Such discount must be able to be mapped to the relevant invoices against which such discount is being given.

3. Buyer must have reversed the Input Tax Credit pertaining to the discount he is now receiving.