Discount on sale price

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my clients who supply the goods to various customers based on the payment terms, as stated below.

Example

Sale price 1000/- + Vat Tax = Bills raised

After supply the goods with bill raised.

1) if the payment received within 15 days, My client would issue credit note 20%, i.e. 200+ vat Tax

2) if the payment received within 15-30 days, My client would issue credit note 10%, i.e. 100+ vat Tax

Now, my query whether the tax can be adjusted for the above transaction while filing the return under the erstwhile TNVAT act? or we can only adjust the basic value.

Please advice me on this.

[PAWAN KUMAR]

Dear Sir,

as per my view, only basic value adjustment is allow. post sale discounts extend through credit note, not deductible in TNVAT.

[Ganeshan Kalyani]

Sir, VAT is a State subject. Each State had its own law. In some State VAT was allowed to be charged on credit note if the sales return is within 6 month and in some 1 year.

[PAWAN KUMAR]

TNVAT not allowed to adjust the tax component.

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

Even the discount was pre-determined and the scheme of the discount has informed the client prior to supply.

[PAWAN KUMAR]

yes not

AI Summary

VAT adjustment on post sale discounts restricted: tax component not adjustable under TNVAT; only base value adjustment permitted. Under the erstwhile TNVAT framework, post sale discounts issued by credit note may reduce the assessable value but the tax component cannot be adjusted via credit note; by contrast, some State VAT laws permit adjustment of the tax component subject to their own temporal limits and statutory conditions.