hello
suppose we get some chemical/scrap on which gst @ 18% on discount
we purchase from RAM 10000kg of product A and we get ₹2000 from RAM
How RAM apply GST
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discount adjustment under GST regime.
Replies (2)
I am sorry can you please clarify what is RAM here, if it is some sort of Discount then treatment is as under
Discounts at time of Supply
Discounts will be treated differently under GST.Discounts given before or at the time of supply will be allowed as deduction from transaction value. Discounts given after supply will be allowed only if certain conditions are satisfied.
Discounts given after supply will be allowed only if-
- It is mentioned in the agreement entered into before sale AND
- input tax credit proportionate to the discount has been reversed by the recipient of the supply AND
- It can be clearly tracked to relevant tax invoice
To summarize discounts-
| Discount is given- | Allowed as deduction from transaction value? |
| On or before time of supply and recorded in tax invoice | Yes |
| After supply but it was known before/at time of supply and can be traced to relevant invoice | Yes |
| Given after supply but it was NOT agreed upon before/at time of supply (whether or not traceable to relevant invoice) | NO |
hi
Its been noted that most of the traders charge GST on the total value and deduct discount amount only from the base value.
lets say basic value: 100
GST (2.5+2.5) :5
Total :105
Discount 10%of basic value : 10
net bill ; 95.
Please confirm the sanctity of this transaction.
Thanks
CAclubindia
