Post-sale discounts clarified: when they constitute consideration for downstream supplies and how GST applies. Clarifies that issuance of financial/commercial credit notes does not reduce the supplier's original transaction value or tax liability, so recipients need not reverse Input Tax Credit tied to such discounts. Post sale discounts from manufacturers to dealers generally reduce the dealer's sale price and are not consideration for the dealer's supply to end customers unless the manufacturer has an agreement with the end customer; in that case the discount forms part of overall consideration. Separate promotional or marketing activities carried out by dealers are taxable only when expressly agreed as distinct services with defined consideration.
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 discounts clarified: when they constitute consideration for downstream supplies and how GST applies.
Clarifies that issuance of financial/commercial credit notes does not reduce the supplier's original transaction value or tax liability, so recipients need not reverse Input Tax Credit tied to such discounts. Post sale discounts from manufacturers to dealers generally reduce the dealer's sale price and are not consideration for the dealer's supply to end customers unless the manufacturer has an agreement with the end customer; in that case the discount forms part of overall consideration. Separate promotional or marketing activities carried out by dealers are taxable only when expressly agreed as distinct services with defined consideration.
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