Stock lying with consignment agent and brances

[RAM SHARMA]

Dear Sir,

1. Whether we have to reverse cenvat credit and vat utilized in manufactuing of finished goods lying with our agent/brances or will be paid IGST on appointed date ? (Section 192193,to 194)

2. What will be the treatment of discount if we have issued debit note/credit note after issue the sales invoice and before the sales invoice.( mention in invoice at the time of removal) 3) How we will assess the transanction value, after deducting the discount value or before the discount value. ? (Section 178)

Thanks & Regards

[YAGAY andSUN]

In present Model GST Law there is no clarity on your point number 1 as mentioned above. This way this will lead to double taxation.

As per Model GST Law, there should be pre announced policy regarding discounts.

[Ganeshan Kalyani]

The terms of discount should have been agreed. Agreement should be there. And also the same should be mentioned on the face of the invoice. If it is satisfied then discount will not form part of sale price. This is my view.

[KASTURI SETHI]

I support the views of both experts. Let us wait for the date of enactment of GST as at present situation about GST is fluid. So many changes are taking place.

AI Summary

GST treatment of goods held with consignment agents unclear, risking double taxation unless transitional credit and IGST rules clarified. GST treatment of finished goods held with consignment agents or branches is unclear in the Model law, creating potential double taxation unless transitional rules clarify whether prior input tax credits must be reversed or IGST becomes payable. Post invoice discounts should be agreed and shown on the invoice to exclude them from the taxable sale price; a pre announced discount policy and consistent invoicing are required to determine transaction value.