TaxTMI 
TaxTMI 
We are selling goods to our customer applying 18 % GST. IN some case party makes early payment of the bill hence cash discount is allowed through credit notes to such customer on without any GST (cash discount condition some time mentioned in PO some time not).Should we apply GST also on such cash discount at the time of issuance of C Note .
GST on cash discount given through credit notes
04 Apr 2020 
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GST on cash discount: credit notes reduce supplier tax only if discount known pre supply and linked to the invoice.
GST on cash discounts via credit notes is permissible to reduce supplier taxable value only if the discount and its parameters were disclosed to the recipient at or before supply and the credit note is linked to the original invoice; absent such pre-supply documentation, post-supply open-ended discounts cannot reduce taxable value. Where allowed, the recipient must reverse any related input tax credit, and practical measures (recipient confirmation, account statements) are advisable given current matching limitations. (AI Summary)
GST on cash discounts via credit notes is permissible to reduce supplier taxable value only if the discount and its parameters were disclosed to the recipient at or before supply and the credit note is linked to the original invoice; absent such pre-supply documentation, post-supply open-ended discounts cannot reduce taxable value. Where allowed, the recipient must reverse any related input tax credit, and practical measures (recipient confirmation, account statements) are advisable given current matching limitations. (AI Summary)