Post sale discounts under GST: when discounts affect input tax credit and when they form part of consideration for supply. Where suppliers issue financial or commercial credit notes the original transaction value and tax liability remain unchanged and the recipient need not reverse Input Tax Credit. Post sale discounts from manufacturer to dealer typically reduce the dealer's sale price and are not consideration for the dealer's supply to the end customer unless the manufacturer has an agreement with the end customer that the dealer is enabled to implement, in which case the discount is includible in overall consideration. Discounts that do not pay for distinct promotional services are not taxable unless a specific agreement defines such services and 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 under GST: when discounts affect input tax credit and when they form part of consideration for supply.
Where suppliers issue financial or commercial credit notes the original transaction value and tax liability remain unchanged and the recipient need not reverse Input Tax Credit. Post sale discounts from manufacturer to dealer typically reduce the dealer's sale price and are not consideration for the dealer's supply to the end customer unless the manufacturer has an agreement with the end customer that the dealer is enabled to implement, in which case the discount is includible in overall consideration. Discounts that do not pay for distinct promotional services are not taxable unless a specific agreement defines such services and consideration.
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