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Discounts in Receipt Vouchers, Goods and Services Tax - GST

Issue Id: - 115643
Dated: 9-11-2019
Discounts in Receipt Vouchers

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Dear Sirs,

One of our clients is into the business of real estate development.

They take advances from customers against future delivery of residential flats. As per their verbal agreement with the customers, 50% of GST Portion (6%i.e. half of 12%) is borne by them as a discount i.e. say if they receive advance of 100, then Taxable value is 89.28 and CGST/SGST portion is 5.36 each. They however, give customer credit of 94.64 (89.28+5.36) and 5.36 being discount is expensed off. The accounting entry of the same is as under:

Bank Dr. 100

Discount Dr. 5.36

To Customer 94.64

To GST Payable 10.72

Now, when they issue receipt voucher against the same, there is no field allowable as per CGST rules to allow discount or any other similar deduction. Then how should the same be given effect to within the purview of the law.

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1 Dated: 11-11-2019
By:- Ganeshan Kalyani

Refer Section 15(3) 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.


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