Discount received amount Rs.10 lakhs is entered in profit and loss account statement.

Discount received amount Rs.10 lakhs is entered in profit and loss account statement. Is RCM payable for discount received amount ?
Replies (2)
Quick Summary
This discussion clarifies whether the Reverse Charge Mechanism (RCM) is payable on a Rs. 10 lakh discount received, which has been entered into the profit and loss account. Generally, RCM is not applicable to discounts received if they represent a price reduction rather than a separate supply of goods or services. Based on the information provided, the discount appears to be a cost reduction, meaning RCM is likely not payable.

RCM (Reverse Charge Mechanism) is applicable on discounts received only if the following conditions are met: 1. The discount is related to a supply of goods or services. 2. The supplier is a registered person under GST. 3. The recipient is required to pay tax on the reverse charge basis. If the discount received is merely an reduction in the price of goods or services and not a supply in itself, RCM is not applicable. In your case, since the discount received amount (Rs. 10 lakhs) is entered in the profit and loss account statement, it appears to be a reduction in the cost of goods or services and not a supply. Therefore, RCM is not payable on the discount  circumstances may vary.

Thank you.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
15 September 2026
Client-site CA associate

Aditya Muley and Co

Mumbai

CA

View Details
Company
09 September 2026
Chartered Accountant

Aviv Global Private Limited

Ahmedabad

CA

View Details
Company
04 September 2026
CA inter Or ca finalist

A Jaiswal and company

Lucknow

CA Final

View Details
Company
ARTICLESHIP 15 September 2026
Freelance Taxation Content Writer Intern

Interactive Media Pvt Ltd.

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 18 September 2026
Industrial Trainee

Twenty Point Nine Five Ventures Private Limited

Noida

CA Inter

View Details
Company
ARTICLESHIP 30 September 2026
CA Article Assistant

CA Suraj Garg & Associates

New Delhi

CA Final

View Details
Company
30 September 2026
Senior Accounts Executive

Codeboard Technology

Chennai

MBA

View Details
Company
08 September 2026
Audit Executive

Thammana & Associates

Srikakulam

B.Com

View Details