TaxTMI 
TaxTMI 
A Pvt Co. has given bulk purchasing incentive scheme to its distributors/dealers as follows: If any dealer buys goods of ₹ 1 crore or more in FY 2019-20, Company will give Europe Holiday package for couple for 4 days. But after covid 19 situation company decided to give incentive in monetary form in shape of credit note of equivalent amount . What will be GST implication, if any? 2. Can company give commercial credit note instead of gst credit note?
credit note
25 Apr 2020 
8 Replies 
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Post supply discount under GST: monetary incentives via credit note require invoice linkage and possible ITC reversal.
A distributor incentive converted into a monetary credit note is a post supply discount: if the discount was disclosed in the invoice at or before supply (excluded from taxable value) no input tax credit reversal is required; if the discount is determined after supply, the recipient must reverse the proportionate input tax credit. Suppliers may issue commercial credit notes, but discounts must be linked to invoices and tax positions adjusted consistently. (AI Summary)
A distributor incentive converted into a monetary credit note is a post supply discount: if the discount was disclosed in the invoice at or before supply (excluded from taxable value) no input tax credit reversal is required; if the discount is determined after supply, the recipient must reverse the proportionate input tax credit. Suppliers may issue commercial credit notes, but discounts must be linked to invoices and tax positions adjusted consistently. (AI Summary)