LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Discount Received- can it be shown as direct income???

s kumar (ca) (105 Points)

06 July 2009

Whether any discount (Read minimum guarantee or MG)received by a franchisee of a company can be shown as direct income in Trading Account??

What are the other direct incomes which can be shown in Trading Account?

Reply
Follow
Share

1 Replies

M.M.SURANA (Director -Taxation ) (532 Points)
Replied 08 July 2009

Mr. Kumar

If discount form the part of purchase say cash discount we can take as a direct income and can be shown in trading a/c. In case discount is in form of trade discount or discount on achieving certain TO or target it is forming part of indirec income . In your case U r the franchisee and U hav recd. MG discount - I feel that it is not a cash discount . U r doing purchase and sales on behalf of your principal, hence it should be indirect income. If Anyone has diff. opinion pl. let me know.