Question ID : 39342

SHORT PAYMENT DUE TO PRICE DIFFERENTIATION

OUR CLIENT RAISES BILL SAY FOR RS 50000/- FOR GOODS SOLD TO ITS IGST CUSTOMER AFTER CHARGING IGST.THAT CUSTOMER IN TURN MAKES PAYMENT OF ,SAY,RS 40000/-,BALANCE RS 10000/- WILL NOT BE PAID DUE TO "PRICE DIFFERENTIATION " AS EVIDENT FROM DEBIT NOTE ISSUED BY CUSTOMER. WHAT WILL BE THE TREATMENT OF THAT PRICE DIFFERENTIATION FORM GST POINT OF VIEW ??

Price Difference in your case is pricing of the product not accepted by the customer for which they have raised a commercial debit note. Considering in the GST regime, credit notes can only be issued by a supplier of goods for reduction of tax for the supplier and corresponding reduction of tax credit by the buyer. It would be advisable to raise a credit note of Rs 10,000 plus applicable GST reducing the supply to actual 40,000 instead of Rs 50,000.