Babyoye.com — gst charge

Hi team,

I would like to ask if one can charge gst after giving a discount on the mrp.

For example,

Option 1: no additional gst charged
—

Mrp on an item = rs 1000

Discount offered =50%

Effective price= rs500 (1000*50)/100)

Option 2: additional gst charged
—

Mrp on an item = rs 1000

Discount offered =50%

Discounted price= 500

Gst @ 18% = 90 (500*18/100)

Effective price= 500 + 90 = 590

Please help me with the answer which option is correct and if we have any rule/document link for the same.