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Discount of 2% offered to a customer for payment within 7 days of invoice is recorded ON the invoice itself. Is it excluded from value?
AExcluded only if both parties register the agreement
BNo — discount is post-supply
CExcluded only if recipient also reverses ITC
DYes — it is recorded in the invoice (Sec 15(3)(a))
Answer & Solution
Correct answer: D. Yes — it is recorded in the invoice (Sec 15(3)(a))
1. The early-payment discount of 2% is recorded ON the invoice, so it is given at or before time of supply.
2. Sec 15(3)(a) explicitly excludes such discounts from value of supply.
3. Note: post-supply discounts (issued via credit note later) need the stricter Sec 15(3)(b) conditions.
_Source: ICAI BoS CA Final Paper 8, Ch 5 "Value of Supply", §Sec 15(3)(a)_
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