discount details on invoice

[Rajendra karri]

Sir, iam a electronic goods dealer, i purchase goods for dealer price and sell for less

example: I purchase fridge for Rs.25,000/- from manufacturer and sell forRs. 24, 000/- to custmers.

The difference amount is compensated by manufacturer in the way of credit note of Rs.1500/- at month end . ultimetley i had earned 500?-Rs. The questions are

1) ITC for 1,000/- got accumulated with me, should i reverse this back...to whom?

2) Is it mandatory to raise invoice for Rs. 25,000/- to customer and mention the discount offered Rs1000/- on the invoice .

 

 

AI Summary

Input Tax Credit treatment clarified: reverse ITC only if supplier's credit note reduces tax liability, otherwise retain ITC.
Input Tax Credit must be reversed only where the supplier's credit note reduces the supplier's outward tax liability; if the manufacturer's post sale allowance is a commercial incentive that does not adjust the GST on the original purchase invoice, no ITC reversal is required. The seller must invoice at the actual transaction value or show a pre supply discount on the invoice when the discount is known at or before supply; misrepresenting taxable value by invoicing the higher amount without discount is non compliant. Reconciliation, reporting of supplier credit notes in returns, and corresponding accounting entries are necessary.