My company provides with credits/points on the basis of how much time a user is using my product. Any user can use these accumulated credits to purchase items listed on company's website. Can i treat such credits as discount since we are converting their credits and charging them less? What is the correct tax treatment of such credits/points?
In my opinion when a user redeems these points, you can deduct from final pricing and charge GST on final price.
For example, item value is 100, you need to charge GST on 100 but if coupon used for Rs. 15 then you need to charge GST on only 85 as 15 will be treated as discount.
Name you coupons as discount coupons.
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