GST APPLICABILITY FOR DISCOUNT AND CLARRIFICATION ON DEBIT NOTE

[SAFETAB LIFESCIENCE]

Dear Experts,

Is Trade Discount is applicable for GST.

Whether we have to charge GST in our Credit Note when we allow Trade Discount to our customers after sales for making immediate/earlier payments before the due date we fix credit terms. What is the difference between Trade Discount and Cash Discount.

If we want to DEBIT some amounts to our suppliers towards price difference, excess freight charged or insurance charges charged in their Invoice, shall raise Debit Note against their suppliers invoice. If so GST is applicable or not on that debit amounts.

AI Summary

Trade discount exclusion from transaction value under GST requires pre-agreement and invoice linkage, with ITC reversal by recipient.
Trade discount, including cash and other commercial discounts, is excluded from GST transaction value where it is pre-agreed and linked to the invoice; post-supply discounts should be documented by credit note referencing the invoice and trigger reversal of input tax credit by the buyer. Debit notes recording additional amounts charged after invoicing are subject to GST, and failure to pass agreed discounts renders the supplier liable for GST, interest and penalty.