Isn't this Double GST?

[Adith]

Item MRP : 1299 ( Inclusive of GST)
Discount they "gave" : 50%

Final Tax invoice : 1299 - 651 ( 50%) discount = 658 + 116 ( 18% gst of 658) + 765.

Doesnt the MRP which is incl of GST already have the gst value in it? Why is it again added separately?

Shouldnt the correct calculation be : 1065 ( MRP without GST ) - 532 ( You gave 50% discount) = 533 + 96 ( 18% gst of 532) = 629 ?

 

[sahilgulati5]

No. It is not.

For example 1000rs is the MRP of the product.(incl of tax)

Dealer price/store keeper gets the product(purchase price) for 400+gst.

Now comes the marketing strategy 50%off from the mrp.

Now the shop keeper has 2 ways to sell and what margin he requires to keep with him.

Left assume GST is 12%

Option 1. Flat 50% off he can sell u at 500+gst(60). He will earn 100rs as his profit

Option 2. Flat 50% off he can sell now at 500 incl of gst. Now he will earn 46rs as his profit

So you see there is no double GST its about how much profit the dealer wants to cover, so that he can cover his expense, other things etc etc

 

[Adith]

No. It is not.

For example 1000rs is the MRP of the product.(incl of tax)

Dealer price/store keeper gets the product(purchase price) for 400+gst.

Now comes the marketing strategy 50%off from the mrp.

Now the shop keeper has 2 ways to sell and what margin he requires to keep with him.

Left assume GST is 12%

Option 1. Flat 50% off he can sell u at 500+gst(60). He will earn 100rs as his profit

Option 2. Flat 50% off he can sell now at 500 incl of gst. Now he will earn 46rs as his profit

So you see there is no double GST its about how much profit the dealer wants to cover, so that he can cover his expense, other things etc etc

Im not asking about how they make sales. You are totally missing my point.

Please look at the tax invoice image. The whole point of a tax invoice is to know what is actually being taxed, correct?

MRP is quoted as 1299. This ALREADY includes gst of 18% ( Actual cost of product without gst is 1065 ).

They gave me a discount on this MRP. So, 1299-651 = 658 ALREADY includes 18% gst in it.

Then they applied 18% gst on this discounted amount THAT ALREADY INCLUDES GST, so 116 rs . Isnt this double gst?

I have attached an Amazon order tax invoice where cost of product is clearly specified SANS GST and then GST is added to it.

 

[sahilgulati5]

Im not asking about how they make sales. You are totally missing my point.

Please look at the tax invoice image. The whole point of a tax invoice is to know what is actually being taxed, correct?

MRP is quoted as 1299. This ALREADY includes gst of 18% ( Actual cost of product without gst is 1065 ).

They gave me a discount on this MRP. So, 1299-651 = 658 ALREADY includes 18% gst in it.

Then they applied 18% gst on this discounted amount THAT ALREADY INCLUDES GST, so 116 rs . Isnt this double gst?

I have attached an Amazon order tax invoice where cost of product is clearly specified SANS GST and then GST is added to it.

Discount is on the mrp and not not the GST. So u will have to pay for the GST.

If I m not wrong it’s not Flat 50% offer. Should be up to 50% offer.

If its flat 50% offer then u can raise n issue

 

[Dobbiee]

Im not asking about how they make sales. You are totally missing my point.

Please look at the tax invoice image. The whole point of a tax invoice is to know what is actually being taxed, correct?

MRP is quoted as 1299. This ALREADY includes gst of 18% ( Actual cost of product without gst is 1065 ).

They gave me a discount on this MRP. So, 1299-651 = 658 ALREADY includes 18% gst in it.

Then they applied 18% gst on this discounted amount THAT ALREADY INCLUDES GST, so 116 rs . Isnt this double gst?

I have attached an Amazon order tax invoice where cost of product is clearly specified SANS GST and then GST is added to it.

Though this calculation is not correct, but yes the discount is not 50% off.
Its more of a marketing gimmick to fool the customer.
Actual discount comes out to be 41%
Also there is no duplication of GST.

See the attached excel to understand calculation.

 

[panchabhut]

Nothing new. Many brands advertise sales that way - 50% discount on MRP, GST payable extra on discounted price. Its marketing gimmick.

 

[Chiraggyl]

Firstcry has mastered in this.. they will show you 60% on mrp but it’s actually around 53% discount onMRP..

Normally people do if they have to bill mrp 100 rs item with 18%GST they show item amount around 84 and rest add as gst..

so ideally with 50% discount item cost should drop to 42 and rest as GST to make total of 50…

But to save few.. they will show you 50% discount but actually gives around 42% discount.. so item amount will become 50 and 8 rs as GST and makes total 58 on bill

 

[Adith]

Discount is on the mrp and not not the GST. So u will have to pay for the GST.

If I m not wrong it’s not Flat 50% offer. Should be up to 50% offer.

If its flat 50% offer then u can raise n issue

But as per GST Rule of Section 15(3) of the CGST Act , discount should be applied pre-tax . If discount is applied on MRP incl of tax, they cannot charge tax again

Though this calculation is not correct, but yes the discount is not 50% off.
Its more of a marketing gimmick to fool the customer.
Actual discount comes out to be 41%
Also there is no duplication of GST.

See the attached excel to understand calculation.

Your method is exactly what Firstcry has done. I acknowledge the fact that they show 50% discount but the actual discount is like 43% . Issue is not that im getting lesser discount.

This is from chatgpt which matches my calculation:

​

Step-by-Step Calculation (Correct Method)​

• Original MRP (including 18% GST): ₹1,299
• Breakdown of MRP:
  
  • Base price = ₹1,100.85 (₹1,299 ÷ 1.18)
  • GST (18%) = ₹198.15
• 50% Discount on MRP:
  
  • Discounted Price = ₹1,299 × 50% = ₹649.50
• New Base Price & GST (should be proportionally reduced):
  
  • New Base Price = ₹550.43 (₹649.50 ÷ 1.18)
  • New GST (18%) = ₹99.07
  • Final Price Payable: ₹649.50 (including correctly adjusted GST)

---

What if the company recalculates GST on the discounted price? (Wrong Method)​

If the company applies GST again after discounting the price, they might do this:

• 50% discount on ₹1,299 → ₹649.50
• Then adding 18% GST on ₹649.50 → ₹649.50 + ₹116.91 = ₹766.41
• You end up paying ₹766.41 instead of ₹649.50!
• This is incorrect and leads to overcharging!

Yes, they applied discount on MRP which includes GST so they pay me lesser discount. But they again applied GST on the discounted value without removing the tax from it. Thats where im having issue with. Can you have a look and say whether this is wrong calculation from my side?

 

[Dobbiee]

But as per GST Rule of Section 15(3) of the CGST Act , discount should be applied pre-tax . If discount is applied on MRP incl of tax, they cannot charge tax again

Your method is exactly what Firstcry has done. I acknowledge the fact that they show 50% discount but the actual discount is like 43% . Issue is not that im getting lesser discount.

This is from chatgpt which matches my calculation:

​

Step-by-Step Calculation (Correct Method)​

• Original MRP (including 18% GST): ₹1,299
• Breakdown of MRP:
  • Base price = ₹1,100.85 (₹1,299 ÷ 1.18)
  • GST (18%) = ₹198.15
• 50% Discount on MRP:
  • Discounted Price = ₹1,299 × 50% = ₹649.50
• New Base Price & GST (should be proportionally reduced):
  • New Base Price = ₹550.43 (₹649.50 ÷ 1.18)
  • New GST (18%) = ₹99.07
  • Final Price Payable: ₹649.50 (including correctly adjusted GST)

---

What if the company recalculates GST on the discounted price? (Wrong Method)​

If the company applies GST again after discounting the price, they might do this:

• 50% discount on ₹1,299 → ₹649.50
• Then adding 18% GST on ₹649.50 → ₹649.50 + ₹116.91 = ₹766.41
• You end up paying ₹766.41 instead of ₹649.50!
• This is incorrect and leads to overcharging!

Yes, they applied discount on MRP which includes GST so they pay me lesser discount. But they again applied GST on the discounted value without removing the tax from it. Thats where im having issue with. Can you have a look and say whether this is wrong calculation from my side?

This calculation is correct. Earlier you had said base price as 1065.

What first cry is doing is only fooling customers. Instead of giving 50% off they are giving less.
But when they are generating bill they are showing legally valid calculation and paying proper GST on actual sale price to govt.

 

[Dobbiee]

If you want you can take up the case. Max that would happen is that firstcry would change its way of showing in the invoice.
No-where it would get proven that double GST is charged from the customer.

 

[habibmy]

This Invoice is wrong, as they already mentioned that MRP is 1299 (with tax) and discount is 651 so total should be 648 without shipping. They have not provided the discount that they have mentioned.