harry (Awaiting ca final results) (461 Points)
21 July 2009Can Cash discount & trade discount both be taken to reduce the sales value?
If cash discount is shown as an indirect expense in the books, can it be taken to reduce the sales value?
If cash discount which is recorded after recording sales for the month, can it be taken to reduce the sales value?
EASWARA SRINIVAS ATTULURI
(MANAGER ACCOUNTS)
(43 Points)
Replied 21 July 2009
No,It's purely indirect expenses,will effect the net profit of the company,not sales
Jyothi Sharma
(Sr. Manager - Finance)
(27 Points)
Replied 19 February 2010
Request to pls share any literature or any document which shows that cash discount cannot be reduced from sales.
CA. Hari Kishan
(Chartered Accountant)
(2704 Points)
Replied 25 February 2010
Discount allowed is deductible from sales (taxable turnover) as per rule 3(2)(c) of the Karnataka Value Added tax rules, 2005. However the tax collected on sales shall be payable to the department and cannot be reduced to the extent of cash discount deductible.
Further it is important to note that VAT is not reversable on the discounts allowed in the form of debit / credit notes as stated in provisio to rule 3(2) of the Karnataka VAT Rules, 2005.
Please feel free to revert with your comments.
| Originally posted by : Jyothi Sharma | ||
 |
Request to pls share any literature or any document which shows that cash discount cannot be reduced from sales. |
 |
SHUVRO
( (WANT TO LEARN) )
(175 Points)
Replied 20 January 2011
@ PC C
does ur statement holds good after the below data?
A Guide to KARNATAKA VAT Audit
(2) The taxable turnover shall be determined by allowing the following
deductions from the total turnover:
(a) The aggregate of the sale prices received and receivable by the
dealer in respect of sales of any goods in the course of INTER-
STATE trade or commerce and export out of the territory of India and
sales in the course of import into the territory of India.
(b) The value of all goods transferred or despatched outside the State
otherwise than by way of sale.
(c) All amounts allowed as discount:
Provided that such discount is allowed in accordance with the regular
practice of the dealer or is in accordance with the terms of any
contract or agreement entered into in a particular case; and the tax
invoice or bill of sale issued in respect of the sales relating to such
discount shows the amount allowed as discount; and
Provided further that the accounts show that the purchaser has paid
only the sum originally charged less discount.
(d) All amounts allowed to purchasers in respect of goods returned by
them to the dealer:
Provided that the goods are returned within a period of six months
from the date of delivery of the goods and the accounts show the date
on which the goods were returned, the date on which the refund
was made and the amount of such refund together with the details
of credit notes issued as specified under sub-section (1) of the
Section 30.
(e) All amounts received from the seller in respect of goods returned to
them by the dealer, when the goods are taxable under sub-section (2)
of section 3: Provided that the goods are returned within period of six
months from the date of delivery of the goods and the accounts show
the date on which the goods were returned and the date on which the
refund was made and the amount of such refund.
(f) All amounts for which goods exempt under Section 5 are sold.
(g) All amounts realised by sale by a dealer of his business as a whole.
(h) All amounts collected by way of tax under the Act;
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