All
trade discounts are allowed as deduction while computing taxable turnover if
such discounts are given in normal course of business- Supreme Court.
In
Maya Appliances P Ltd Case Supreme Court has clarified that assessee is allowed
deduction of all trade discounts whether on targets or quantity for computing
the taxable turnover.
The
Maya Appliances P Ltd had allowed
discounts on quarterly basis to its dealers on the basis of turnover targets
done by them and gave discounts in next quarter in sale invoices for the
earlier quarter sales turnover and calculated the turnover after such
discounts.
The
Commercial Tax Department disallowed the quarterly discount given to its
dealers on the plea that the discount was not directly related to the sales invoices
raised in relevant quarter. The Company filed an appeal and was allowed in
favour of Assessee Company but fighting with revenue at all stages went to Supreme Court.
The Supreme Court held
that all trade discounts given following normal trade practices are allowed as
deduction while computing taxable
turnover. So,
all trade discounts were permissible deductions in case of Maya Appliances P
Ltd and the appeal allowed in favor of Assessee Company.
