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.

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.