In Brief
Maya Appliances manufactured home appliances and offered performance-based quarterly discounts to its distributors. It claimed these discounts as deductions from total turnover in computing taxable VAT. Tax authorities disallowed the discount because it was given in invoices of the subsequent quarter based on prior performance, not shown on the original sale invoice. The Supreme Court held that discounts qualifying under Rule 3(2)(c) need not be shown on the original invoice if proved by contemporaneous records and reflected in accounts, provided they accord with regular trade practice. The Court allowed the appeal and directed that the appellant was entitled to deduct the trade discount following established principles.
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