26 October 2020
WHAT GST IMPLICATION ARISE WHEN PRICE OF MOBILES DROP AND DEALER REDUCE THE PRICE OF MOBILES AFTER SALE AND GIVE CREDIT NOTE TO THE RETAILERS WITHOUT GST. DEALER ALSO GIVE SCHEME BENEFITS TO THE RETAILERS AND WITHOUT IMPLICATION OF GST, SO PLEASE GUIDE ME IS THE DEALER DOING CORRECT ACCOUNTING OR NOT.
26 October 2020
Credit notes are covered under section 34. So if dealer sells a mobile for Rs.10,000/- to retailer on 1st October,2020 then he charges GST on 10,000/-.This sale is complete.Now let us say on 1st November, dealer revises the prices to Rs.9,500/- retrospectively and therefore issues credit note of Rs.500/- to retailer then he can not reduce his GST liability because the price agreed at the time of sale is Rs.10,000/- as per section 34. That is why the dealer issues credit note of Rs.500/- without GST.
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