Post sale discount treatment under GST: conditional discounts are consideration for services and attract GST and ITC consequences. Treatment of post sales discounts under GST turns on their nature and any dealer obligations. Discounts without further dealer action relate to the original supply and may be excluded from the supplier's value if section 15(3) conditions are met. Discounts conditional on dealer promotional activity are consideration for services supplied by the dealer and attract GST with corresponding ITC for the supplier. Discounts paid to enable reduced customer prices must be added to the dealer's value of supply; registered customers can claim ITC only to the extent of tax paid. Where discounts cannot be excluded, suppliers may issue financial/commercial credit notes but cannot reduce original tax liability; dealers need not reverse ITC if they adjust payment per the credit note and original tax charged.
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 sale discount treatment under GST: conditional discounts are consideration for services and attract GST and ITC consequences.
Treatment of post sales discounts under GST turns on their nature and any dealer obligations. Discounts without further dealer action relate to the original supply and may be excluded from the supplier's value if section 15(3) conditions are met. Discounts conditional on dealer promotional activity are consideration for services supplied by the dealer and attract GST with corresponding ITC for the supplier. Discounts paid to enable reduced customer prices must be added to the dealer's value of supply; registered customers can claim ITC only to the extent of tax paid. Where discounts cannot be excluded, suppliers may issue financial/commercial credit notes but cannot reduce original tax liability; dealers need not reverse ITC if they adjust payment per the credit note and original tax charged.
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