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Discounts

Jitender Singh Rawat (Advocate) (78 Points)

07 December 2018

Some Sellers on their invoices make provision of Discount before calculating GST, whereas some after calculating GST. But natural after deducting Discount GST will be decrease.

Which is the best trade practice?

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7 Replies

PEP CONSULTANCY (118 Points)
Replied 07 December 2018

Discount on taxable value is the best option

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Radha Mundhra (28 Points)
Replied 07 December 2018

should do the discount before charging gst

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 07 December 2018

Discount will be provide after calculating GST on the Basic value...

Arun Kapoor (Gst Practitioner) (24 Points)
Replied 07 December 2018

Dear Mr. Jatinder

Please note that as per section 15(3)a of CGST Act 2017 The value of supply shall not include any discounts which given before or at the time of supply if such discount has been duly recorded in invoice issued in respect of such supply. so gst must be leveid on taxable value which comes after deduction of discounts.

Jitender Singh Rawat (Advocate) (78 Points)
Replied 07 December 2018

Dear Arun Ji, query was not regarding provision of Discounts as per GST as what section 15(3) suggest. Query was regarding what should be the general practice while providing discount on generation of a bill. Some provide discount on value before tax and then calculate GST, however some calculate GST on value before tax and thereafter deduct discount if customer ask for. Question was, what should be the best practice?

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Arun Kapoor (Gst Practitioner) (24 Points)
Replied 07 December 2018

Yes i understood the concern Jitendra Ji As discussed in provision they should deduct discount before charging any gst in invoice which is in line with the Gst law so what else the best practice would be ? Deduction of discount after charging gst in the invoice would amount to extra collection of gst from customer. Trade should do that practice which is in the better interest of a Customer.

Jitender Singh Rawat (Advocate) (78 Points)
Replied 07 December 2018

Well said Arun Ji, but on the other hand there are revenue losses too. Coz making discount before charging GST will let down the Basic Price of Goods resulting the decrease in GST amount. Thanks for the replies anyways.