journal entry of cash discount when vat is applicable

good question

If discount is affecting the VAT amount then cash discount shall be considered in accounting entry, else you can simply ignore it!

If a Tax Invoice is raised, and we are receiving payment agaisnt it. If we do no consider the cash discount entry in our books the amount of Cash DIscount offered will still be standing to the Buyers' Debit.

Thus the closing entry would be:

Cash A/c ...dr

Discount (Cash)...dr

To Party A/c

To VAT Payable A/c

Fellow members please share your views.