Mr Y sold goods on credit Rs. 10000+18% GST to Mr. X, and then Mr Y allowed entire Rs. 10000+18% as cash discount
1. Is any issue on supplier for issuing financial credit including gst?
2.If GST Rs. 1800 is already paid to Mr. Y, then remaining Rs. 10000 is allowed as cash discount then receipent is required to reverse the itc?
Query relating to finacial credit note
Replies (1)
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Supplier: Can issue a financial credit note for the cash discount, but cannot reduce their GST liability.
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Recipient: Is not required to reverse the ITC because the original tax paid to the government remains unchanged.
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Key Condition: This applies specifically to financial/commercial credit notes where no GST adjustment is made. If a GST-compliant credit note were issued (which would require meeting specific conditions like prior agreement), then the supplier could reduce their tax liability, and the recipient would then be required to reverse the proportionate ITC.
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