Example: A -Supplier M - Buyer
A offering to M 10% discount for getting prompt payment at the year end:
1.No prior period agreement
2.Can not trace bill wise.
For this at the year end, A issues to M a credit note( without charging GST).
Query 1: This discount amount is taxable income from the part of 'M'.
2: If its income, How can pay the tax by 'M'.
Kindly give reply in detail...thanks in advance
This is cash discount (for prompt payment), so GST will not be charged in credit or debit note.
GST is applicable when there is a supply and in this case there is no supply, so GST is not chargeable on this case.
GST will be charged in Debit Note or Credit note only for trade discount.
So answer to your question is:
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