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
ARTICLESHIP 17 October 2026
Articled Assistant

RRPM & Associates LLP

Chennai

CA Inter

View Details
Company
30 September 2026
Senior Accountant

Codeboard Technology

Chennai

B.Com

View Details
Company
ARTICLESHIP 01 October 2026
Articled Assistant

KPSN & Associates LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
19 October 2026
Accountant

Jari Saree Center

New Delhi

Others

View Details
Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details
Company
Featured 03 October 2026
Accountant

A P Lodha and Associates

Jalna

B.Com

View Details