Rytvae Consulting · Think Right · Invest Right
Bill Discounting Calculator
Result
Chart
Show formula & working
Discount = Face value × rate × days ÷ 365
Proceeds = Face value − Discount − Charges (with GST)
Effective annual cost = (Discount + Charges) ÷ Proceeds × 365 ÷ days
Details
GST on interest and discount: rates and rules as of 28-Oct-2026 · Source: Notification 12/2017-Central Tax (Rate), entry 27(a); CBIC Circular 218/12/2024-GST (interest or discount fully exempt; fees over and above interest are a separate taxable service). Every figure based on it stays editable.
How this works
Discounting turns a bill or invoice due in the future into cash today. The bank deducts its discount upfront and collects the full amount on the due date.
Because the discount is worked out on the face value but you receive less, the true cost on the money you get is a little above the quoted rate — more so once charges are added.
Frequently asked questions
Is GST charged on the discount?
No. Discount on bills is treated like interest on credit and is exempt from GST. Processing and handling charges attract GST.
What if the buyer pays late?
Under a with-recourse facility the bank recovers from you, usually with overdue interest. Check the terms.
Using bills, LCs or guarantees?
The cheapest structure depends on your buyers, suppliers and banking limits. Talk to Rytvae.