20 November 2009
A) In case discount is offered to the cutsomer in Invoice the VAT is to be calculated on the net amount.
e.g Item Cost 100,000 less: Disc 5,000 Net sale 95,000 VAT 4% 3,800 Gross sale 98,800
B) Similarly in case discount is offered through a credit note at a later stage (say on account of turnover discount etc) is vat to be calculated on the same?
e.g. In Invoice Item Cost 100,000 VAT 4% 4,000 Gross sale 104,000
Credit Note
Discount allowed Item cost 5,000 VAT 4% 200 Total 5,200
Or the discount allowed will only be 5,000 and total VAT of 4,000 will have to be deposited to the govt? In this case the customer is at loss.
21 November 2009
I also think that you have to give Credit note for Rs. 5000/- only. not Include VAT on it. its for only one time while Preparing Invoice Mr. Rakesh is right.
03 January 2010
There are some items, where it is necessary to give discount thru credit note, in that case credit note will be issued on basic amount + applicable vat. but it should be raised within prescribed time in law.
CAclubindia
