Turnover discount

[Vinayak Daga]

1. Discounts to be received on the basis of Turnover( Purchase ) from Seller on the basis of FY 23-24, it is on the basis of structural discounts as per purchase agreement, which is depends totally on purchase turnover and in some cases no agreement is present

2. Discounts to be received are in the form of Commercial Credit Notes without GST..(No GST is reversed).

3. What should be the treatment of Credit Notes described above in the books of Buyer/Purchaser?

a. Whether such received discount should reduce from purchase in trading account?

b. or it should be shown as indirect income?

Any other clarification will be briefed.

Thanks for your kind reply and participation.

AI Summary

Commercial Credit Notes: Volume Discounts Treated as Other Income Under Accounting and GST Guidelines A discussion forum post explores accounting treatment for commercial credit notes based on annual purchase turnover. The key issue involves whether such discounts should reduce purchase costs or be recorded as indirect income. The consensus is to treat these volume-based discounts without GST as 'Other Income' in the profit and loss account, not reducing purchase value, based on accounting principles and GST regulations.