VAT added on the discounted price

HI,

Me and my wife purchased one ladies kurti (MRP : 1599, inclusive of all taxes), on 20% discount. When i saw the bill the following we mentioned.
name of the product: <>
Qty : 1
Price : 1599
disc : 20%
amount : 1279

At the bottom of the bill, :
total qty :1
Gross amount : 1599
total discount : 320
net amount : 1343
vat amount : 64

I am not able to understand how they can charge the VAT on the discounted price. Please let me know wheather this is legal and correct? can you please help me to take any action against them.


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