TaxTMI 
TaxTMI 
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?
Can we reverse the out put tax liability when issuing cash discount?
29 Aug 2017 
3 Replies 
1484 Views Asked by
Output tax reversal on discounts depends on pre-sale discount treatment and credit note requiring recipient to reverse input tax credit.
A discount known before supply is excluded from the taxable value and not subject to GST; a credit note issued after supply reduces the supplier's output tax liability only if the recipient reverses the proportionate input tax credit, and statutory valuation and credit-note rules must be followed. (AI Summary)
A discount known before supply is excluded from the taxable value and not subject to GST; a credit note issued after supply reduces the supplier's output tax liability only if the recipient reverses the proportionate input tax credit, and statutory valuation and credit-note rules must be followed. (AI Summary)