Clarification on various doubts related to treatment of secondary or post-sales discounts under GST.

Post-sales discounts under GST affect whether a discount reduces supplier value or is taxable consideration for dealer services.

Post sales discounts are assessed by their substance: a discount without dealer obligations is treated as related to the original supply and may be excluded from the supplier's value of supply if statutory conditions are met. If the discount is an incentive requiring the dealer to undertake promotional activities, it is separate consideration for services and taxable in the dealer's hands, with the supplier eligible for input tax credit. Discounts paid to induce dealers to reduce customer prices must be added to the dealer's transaction value, limiting a registered customer's input tax credit to tax actually paid to the dealer. Where suppliers issue financial/commercial credit notes but cannot reduce original tax liability, dealers need not reverse input tax credit if they pay the reduced value after adjusting the credit notes plus the original tax charged.