IMPACT OF GST ON DISCOUNTS ALLOWED AFTER BILLS ISSUED

[ROHIT GOEL]

IN A CASE GOODS ARE PURCHASED FOR RS. 100 AND GST OF RS. 12 PAID TO SELLER. SUBSEQUENT TO THIS SELLER ISSUES AN ADDITIONAL DISCOUNT OF RS. 5/- AGAINST GOODS OF RS. 100/- BUT THE AMOUNT IS NOT REVERSED THROUGH DEBIT / CREDIT NOTES. SELLER SAYS THAT HE WILL NOT ISSUE ANY CREDIT NOTE AND THERE IS NO REQUIREMENT FOR US TO ISSUE DEBIT NOTE IMPLYING THAT GST OF RS. 12/- IS PAID TO GOVERNMENT TAKING TRANSACTION VALUE OF RS. 100/- INPLACE OF NET VALUE OF RS. 95/-.

IN SUCH A SCENARIO IF I DEBIT RS 100/- AS PURCHASE AND REDUCE DISCOUNT OF RS. 5/- FROM PURCHASES MAKING IT NET AT RS. 95/-. CAN I WILL BE ELIGIBLE FOR GST INPUT OF RS. 12/- OR IT WILL BE 12% OF RS. 95/- .

[RAJA SWAMINATHAN]

The given situation suggets that the grant of discount was not known at the time of finalisation of contract hence the same cannot be considered to arrive at the transactionvalue for GST.

[KASTURI SETHI]

Dear Querist,. Read Section 15 (3) of CGST Act, 2017 for admissibility of discount. If you fulfill these condition discount is allowed.

[Rajagopalan Ranganathan]

Sir,

If the supplier claims refund of excess gst paid then you have to debit the excess credit taken by you. If the supplier is reducing the price only then you take the full credit of ₹ 12/- being the gst already paid.

[Himansu Sekhar]

I support the view of the experts

[Ganeshan Kalyani]

If the supplier is not providing you the credit note then the tax benefit which he was eligible is not claimed by him i.e. when he sold goods he paid tax and on giving you discount he could have issued you debit note with tax and reduced his liability. Now that he has not done so, you are eligible to tax credit of full tax.

[rameshsri srinivas]

I agree with the views of the experts

[rajkumar shukla]

How the additional discount has been passed if not through credit note.

AI Summary

GST input tax credit may remain claimed when a post supply discount is not reflected by supplier credit note. Where a supplier grants a post billing discount without issuing a credit note, the recipient's entitlement to Input Tax Credit depends on whether the discount was attributable at the time of supply under Section 15(3). If the supplier does not issue a credit note, the recipient may retain the full credit claimed on the original transaction; if the supplier later reduces output tax or claims refund, the recipient must debit or reverse any excess credit taken.