TREATMENT OF DISCOUNT IN GSTR3B

[NAMAN DOKANIA]

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??

AI Summary

Credit note treatment under GST: GST-bearing credit notes adjust supplier turnover and require recipient ITC reversal where applicable.
A credit note with GST reduces the supplier's outward supplies and requires the recipient to adjust Input Tax Credit; the GST component reduces recipient ITC while the basic amount reduces purchase cost. A financial credit note without GST, treated as an incentive or discount, does not directly affect recipient ITC and is not a supply, but the supplier must adjust turnover and output tax accordingly.