24 July 2013
VAT is computed after deducting trade discount but before cash discount.Example:- Sale price............................100000 (-)Trade discount 10%..................10000 Net....................................90000 (+)Vat @ 5%.............................4500
(-)Cash discount @5% on Rs.90000........4500 net amount receivable..................90000
14 August 2013
The net amount receivable or received is the taxable amount. Cash discount is not mentioned in the invoice.It may be mentioned in the invoice for encouraging prompt and early payment.Hence the value arrived after reducing trade discount only is to be taken for VAT calculation.Cash discount arises only at a later stage as an incentive for early payment.....mjk
CAclubindia
