Discount after Supply

[Kaustubh Karandikar]

XYZ is issuing invoice for the supply of goods and charging full GST on the full value of the invoice. At the bottom of the invoice, a remark is given as ‘if payment is received within 7 days, 2% discount will be given’. Can XYZ subsequent to supply issue credit note with GST to the customer for 2% discount if the payment is received within 7 days and reduce his GST liability in that month to the extent of the GST on 2% discount shown in the credit note?

AI Summary

Debate on XYZ's GST Credit Note for 2% Discount Under Section 15(3)(a) of CGST Act, 2017 Sparks Legal Concerns. A discussion on a forum revolves around whether a company, referred to as XYZ, can issue a credit note with GST for a 2% discount if payment is received within 7 days, thereby reducing its GST liability. Initial responses suggest that such conditional discounts were not allowed in Central Excise and remain inadmissible under GST. However, another participant cites Section 15(3)(a) of the CGST Act, 2017, arguing that if the discount is documented in the invoice, it is permissible. Further replies discuss potential legal interpretations and the possibility of objections by GST authorities due to the lack of explicit provisions for such discounts in the law.