Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

GST On Discounted M.R.P.

18 July 2019

Can any shopkeeper charged GST on discounted MRP ?

Ex.
MRP: 1049/- ( Incl. of all taxes )
Discount @ 30%

shopkeeper collected Rs. 771/- from customer.

calculation : 1049 - 30% (315) = 734 + 5% GST (37) = 771/-

Is the shopkeeper doing right ?

Reply
Follow
Share

3 Replies

sanjith kotni (Articled assistant) (663 Points)
Replied 18 July 2019

There is no MRP concept in GST w
e have to pay GST on transaction value itself which is the invoice value.

Upgrade to CAclubindia Pro. Subscribe Now!

Shivam RC (Student) (23683 Points)
Replied 18 July 2019

According to the Provision of Section 15(1) of the CGST Act 2017, GST is levied on the "TRANSACTION VALUE" of the Supply of Goods or Services or both.

By virtue of Section 15(2) of the CGST Act 2017, the TRANSACTION VALUE includes all types of taxes and duties excluding CGST, SGST, UTGST, IGST, CESS.

Further, as per Section 15(3) of the CGST Act 2017, "Discounts given before or at the time of supply will be allowed as a deduction from transaction value" and should be duly recorded in the Tax Invoice.

Hence the shopkeeper is absolutely right regarding the GST collection.

Mathematically :

Amt actually Paid/Payable ( after giving the effect of Discount ) : Rs. 734.

CGST @ 2.5% on 734 = 18.35/-
SGST @ 2.5% on 734 = 18.35/-

Total Invoice Value = Rs. 770.7/-

Warm Regards.

1 Like