CA Raj Patel (Practicing CA @ Ahmedabad) (90 Points)
12 October 2010I have client for Gujarat VAT.
They are supposed to issue Credit Note on account of Quantity Discount i.e. as and when 1000 qty is purchased by a particular dealer then a discount of 50 per qty.
So my question is that whether it is compulsory to charge VAT on Credit note ??
There is no clearcut mentioned in Act. So i'm little bit confused.
ACMA Obulirajan R
(M.Com, ACMA)
(1119 Points)
Replied 12 October 2010
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It is not compulsory to charge VAT on the credit note given to the customer. It is the sole decision of the company..... |
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However, If you charge VAT on the credit note portion then you can get refund from the dept for which they will as many question and they may harras you and you customer has to pay VAT on the credit note which they received when they go for assement. |
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In another way, instead of raising seperate Credit note, you can deduct the discount portion in the bill its and claim VAT on that.. eg |
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Qty 1000 |
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Value 100 ea |
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Gross Value = 1000*10 = 100000 |
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Discount 50 * 1000 = 50000 |
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Net Value = 50000 debit to customer |
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VAT 12.5% = 6250 |
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Your realisaion Sales = 43750 |
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In this scenario your VAT liability also will come down and your customer also will get a credit on the same. |
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Hope your doubt clreaed????? |
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