cash discount whether gst applicable, Goods and Services Tax - GST

[satbir singhwahi]

Sir

On realisation of sales, cash discount is given to customers. Whether GST is applicable on discount as expence.

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

According to Section 15 (2) of CGST Act, 2017 "

The value of the supply shall not include any discount which is given––

(a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and

(b) after the supply has been effected, if–

(i) such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and

(ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply.

 

[satbir singhwahi]

Sir

Thanks for Reply

But please clarify , when we book discount as expence in books , whether gst on reverse charge u/s 9(4) will be applicable.

[KASTURI SETHI]

Not applicable.

[satbir singhwahi]

Thks Sir

[MARIAPPAN GOVINDARAJAN]

If discount is treated as expenditure, in my view it will attract GST. The views of the experts are solicited.