GST ON TRADE DISCOUNT

[SAFETAB LIFESCIENCE]

Dear Experts,

We are giving post- sales Trade Discount to our customers. The GST rate is for our final products is 12% .

The customer receiving Trade Discount is instructing us to put GST 18% on Discount value and we have given Credit Note with 18% GST several times. We have reduced the Trade Discount Credit Note value in Taxable Sale Value and reduced the 18% GST value from the GST payable in GSTR-3B.

Please confirm the GST rate on Discount 18 % is correct or not. Our GST officials are telling it is wrong and we have to put GST only 12%.

Please clarify with documentary evidences / notification / GO details like that since our customers are MNC Indian company and they will ask evidences from us.

AI Summary

Company Advised to Apply 12% GST on Post-Sales Discounts per Section 15(3) of CGST Act 2017 A company inquired about the correct GST rate on post-sales trade discounts. They have been issuing credit notes with an 18% GST, as instructed by their customers, but GST officials advise applying a 12% rate. Experts clarified that according to Section 15(3) of the CGST Act, 2017, discounts can be excluded from the taxable value if pre-agreed and linked to specific invoices, with the recipient reversing the input tax credit. The applicable GST on credit notes should match the product's rate, which is 12%. Credit notes should reflect this to ensure proper tax adjustments.