Discount on gross value on invoice with multiple tax rates

Vinod (Others) (21 Points)

25 September 2020  

How do we calculate taxable value for invoice with items with multiple rates, if a discount is applied on the gross amount?

Suppose I have an invoice with the following items

Item Value Rate
Item 1  1,000  5%
Item 2  1,000 12%

 

If I give a discount of 10% on the gross amount, how do I calculate the GST?

If I calculate the discount on the 12% item, the total GST is ₹146. (5% of 1000 + 12% of 800)

If the discount is applied on taxable value of the lowest rate, the total GST is 160.  (5% of 800 + 12% of 1000)

If the discount is applied on the total GST before discount, the discounted GST is 153.  (5% of 900 + 12% of 900)