Post-sales discounts: supplier payments can either reduce original supply value or be consideration for dealer services, affecting GST and ITC. Clarification explains that post sales discounts without dealer obligations relate to the original supply and may be excluded from the supplier's value of supply under sub section (3) of section 15; discounts that are consideration for dealer promotional activities constitute separate supplies of services subject to GST and ITC; discounts paid to enable reduced customer prices are consideration added to the dealer's value of supply under section 15, with customer ITC claim limited to tax actually paid; where exclusion is impermissible the supplier may issue financial/commercial credit notes but cannot reduce original tax liability, and dealers need not reverse ITC if they pay the reduced value plus original tax.
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Post-sales discounts: supplier payments can either reduce original supply value or be consideration for dealer services, affecting GST and ITC.
Clarification explains that post sales discounts without dealer obligations relate to the original supply and may be excluded from the supplier's value of supply under sub section (3) of section 15; discounts that are consideration for dealer promotional activities constitute separate supplies of services subject to GST and ITC; discounts paid to enable reduced customer prices are consideration added to the dealer's value of supply under section 15, with customer ITC claim limited to tax actually paid; where exclusion is impermissible the supplier may issue financial/commercial credit notes but cannot reduce original tax liability, and dealers need not reverse ITC if they pay the reduced value plus original tax.
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