Post-sales discounts determine GST treatment: unconditional discounts adjust original supply value, conditional discounts trigger service taxation. Post-sales discounts are governed by clause (b) of sub-section (3) of section 15 and must be characterised by their true nature: unconditional discounts relate to the original supply and may be excluded from the supplier's value of supply if sub-section (3) conditions are met; discounts conditional on dealer promotional activities constitute consideration for a separate supply of services by the dealer, on which the dealer must charge GST and the supplier may claim input tax credit. Discounts enabling dealers to offer reduced prices to customers must be included in the dealer's value of supply, and receipt of financial/commercial credit notes does not compel the dealer to reverse ITC where the dealer pays the reduced net value and the supplier had charged original tax.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Post-sales discounts determine GST treatment: unconditional discounts adjust original supply value, conditional discounts trigger service taxation.
Post-sales discounts are governed by clause (b) of sub-section (3) of section 15 and must be characterised by their true nature: unconditional discounts relate to the original supply and may be excluded from the supplier's value of supply if sub-section (3) conditions are met; discounts conditional on dealer promotional activities constitute consideration for a separate supply of services by the dealer, on which the dealer must charge GST and the supplier may claim input tax credit. Discounts enabling dealers to offer reduced prices to customers must be included in the dealer's value of supply, and receipt of financial/commercial credit notes does not compel the dealer to reverse ITC where the dealer pays the reduced net value and the supplier had charged original tax.
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