gst on incentives

[kantipudi satyanarayana]

Sir,

Whether incentives received on supply of exempt goods is taxable to GST ie. retail outlet of petrol and diesel.

[Rajagopalan Ranganathan]

Sir,

It is for your information that petrol and diesel are not under GST.

If you don't mine, can you elaborate the situation like which type of Incentives will derive on suppl of exempt of goods?

[Ganeshan Kalyani]

The benefit on exempted goods is that one does not pay GST on outward supply, no e-way bill is required to be generated on movement of goods, filing of GSTR 1 is easy, 2A reconciliation is not required, if exempted goods is exported then corresponding input tax credit is allowed etc.

[Rajagopalan Ranganathan]

Sir,

In respect pf petroleum products like petrol and diesel provisions of Central Excise Act, 1944 is applicable and not provisions of GST Act.

[KASTURI SETHI]

GST can be levied only on a consideration received for a taxable supply of goods or services or both. Since your retail sale of petrol & diesel is out of the scope GST net, incentives received by you are against Non-GST supply. Hence such incentives are also not taxable under GST.

Example ; Agriculture produce is exempt supply. Commission earned by the commission agent against such supply is also exempt. Held by AAR, Haryana reported as 2019 (26) GSTL/337 (AAR) GST IN RE : BHAKTAWAR MAL KAMRA & SONS = 2018 (8) TMI 1859 - AUTHORITY FOR ADVANCE RULING - HARYANA

In the 115th Amendment Bill alcoholic liquor for human consumption and five petroleum products namely crude petroleum, high speed diesel, motor spirit or petrol, aviation turbine fuel and natural gas were kept out of GST.

[Himansu Sekhar]

Incentives are for sale of excisable hoods. More sale, more incentive. Since the supply is not taxable under sec 9(2) of CGST Act, the incentive is also not taxable. Moreover it is not a separate supply other than the principal supply. Also not a service

[Rajendra Prasad]

Dear Himansu Ji,

Please clarify -

1. Incentives received from the petroleum Company toward achieving the sales target is outward supply for the retailer .

2. In the Income Tax Return , Incentives are received are shown under other income . Then in GSTR 9 / 9C , am I required to show it under outward supply or under which column .

Thank you for sparing your valuable time.

[KASTURI SETHI]

In GSTR-9 Table 5(F) to be shown against column non-GST supply.

AI Summary

GST on incentives: incentives tied to sales of excluded petroleum products are not subject to GST and reported as non GST supplies.
Petrol and diesel supplies are outside the GST net; incentives tied to sales of those excluded petroleum products are payments related to a non GST principal supply and are therefore not taxable under GST. Such incentives do not constitute a separate taxable supply and should be reported in GST returns under the non GST supply column.