GST charge on discount Amount

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accountant
461 Points Joined July 2013
supplier requested that we make payment before the due date with a 1% discount on his total Payable amount.

Example. O/S amount Rs.275000

we raised DN of Rs.2750 without GST it correct or not
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On 22 October 2024 at 06:51 Report
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Master in Accounts & high court Advocate
9596 Points Joined December 2011

Yes, that's correct! If the supplier offers a 1% discount for early payment, you can calculate the discount amount as follows:

Outstanding amount (Rs. 275000) x Discount percentage (1%) = Rs. 2750 So, the discount amount is Rs. 2750.

 You can raise a debit note (DN) for this amount without GST, as it's a discount on the outstanding amount.

Here's the entry: Debit Note (DN): - Debit: Supplier's Account (Rs. 2750) - Credit: Discount Received (Rs. 2750)

This will reduce the outstanding amount to

 Rs. 272500 (Rs. 275000 - Rs. 2750).

Remember to verify the calculation and ensure the discount is properly documented and agreed upon with the supplier.

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On 22 October 2024 at 07:30
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Master in Accounts & high court Advocate
9596 Points Joined December 2011

Yes, that's correct! If the supplier offers a 1% discount for early payment, you can calculate the discount amount as follows:

Outstanding amount (Rs. 275000) x Discount percentage (1%) = Rs. 2750 So, the discount amount is Rs. 2750.

 You can raise a debit note (DN) for this amount without GST, as it's a discount on the outstanding amount.

Here's the entry: Debit Note (DN): - Debit: Supplier's Account (Rs. 2750) - Credit: Discount Received (Rs. 2750)

This will reduce the outstanding amount to

 Rs. 272500 (Rs. 275000 - Rs. 2750).

Remember to verify the calculation and ensure the discount is properly documented and agreed upon with the supplier.

Reply
On 22 October 2024 at 07:30

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