Scenario-Based Guide
GST on Discounted Prices
Is GST calculated on the original price or the discounted price? Learn the legal rules under CGST Act Section 15 and calculate your numbers instantly below.
The Rule: Is GST Applied Before or After Discount?
Under Indian GST law (specifically Section 15 of the CGST Act), GST is calculated on the transaction value — which is the price actually paid or payable for the goods or services.
GST is always calculated on the post-discount taxable amount (the price after discount), provided the discount is given before or at the time of supply and recorded on the invoice.
Post-supply discounts (like cash discounts for early payment) are only excluded from taxable value if they were agreed upon before or at the time of supply and are linked to specific invoices.