1. If the seller gives me Credit Note with GSt on account of incentive then it will reduce my ITC. Henceforth, the Incentive shown in my books as Indirect Income will not form part of turnover as per GST Law??
2. If the seller gives me Financial Credit Note without GST being charged as an incentive then will it lead to increase in my tax liability thus forming part of my turnover??
Exploring how discounts in GSTR-3B affect turnover and Input Tax Credit under GST law. A discussion on the treatment of discounts in GSTR-3B under GST law addresses whether incentives reflected as indirect income affect turnover. If a seller issues a credit note with GST, it reduces the buyer's Input Tax Credit (ITC). A financial credit note without GST does not impact ITC but may be considered income. The credit note affects the supplier's profit and loss, not the recipient's, and does not alter the buyer's turnover. The consensus is that credit notes relate to the main supply, reducing purchase costs, and the turnover impact is on the seller's side. (AI Summary)
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