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Sir can you please help me how to treat Sale tax on purchases.
Like we have IFRS-15 for Revenues.Scenario 1:
Supplier thought we will not achieve cash discount according to past experience so he will send us invoice of $200 (no deduction of cash discount of $40). Whereas, we achieve the cash discount by paying in time so supplier will decrease sales by $40. On other hand, customer will record it as discount received of $40. Am I correct?Scenario 2:
Supplier thought we will achieve cash discount according to past experience so he will send us invoice of $160 (after deducting cash discount of $40). However, we had not achieve so supplier will increase sales by 40, on the other hand what will we do as a customer.
Will we increase our purchases by 40?Please help me with this. Thank You.
The sales tax is calculated on the final invoice amount (after whatever discounts appear on the invoice). If the amount paid changes (because the discount is taken or not taken) then the sales tax is not recalculated.
Actually, I mistakenly wrote sale tax once instead of discount in the entire query.
Thank you for the information by the way.
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