Can we reverse the out put tax liability when issuing cash discount?

[RameshBabu Kari]

Q1- Can we reverse the out put tax liability when issuing cash discount?

Q2- Can we reverse the output tax liability when issuing credit note?

AI Summary

Guidance on GST tax liability reversal for discounts; check Section 15, Section 34, and Rule 53 for compliance. A query was raised about reversing output tax liability when issuing cash discounts or credit notes under the Goods and Services Tax (GST) framework. One response indicated that discounts can be deducted from the transaction value if conditions in Section 15 of the CGST Act are met. Another response advised consulting Section 34 of the CGST Act and Rule 53 of the CGST Rules. A third response clarified that issuing a credit note reduces liability only if the receiver reverses the proportionate credit, and discounts known before supply are not subject to GST.