Can I apply discount to only services on invoices?

No. As of now, the discount applies to the total invoice amount and not the services or expenses portion of the invoice. Check CORE Help Center for details. Consider creating separate invoices for services and expenses. Then apply the discount to the invoice with services. Another workaround can be creating a phased project with a separate phase for expenses. Then create a joint invoice and apply the discount on the parent project, the one that tracks only services.