Dear All Experts,
One of my client want to give turnover discount for financial year 2020-21. As such, there was not any pre-contract for giving such discount before any sales made.
Whether GST is leviable on such discount by giving credit note?
Note: Turnover Discount is given against each invoices raised to customer/recipient in 2020-21.
GST Applies to Uncontracted Turnover Discount for 2020-21, Section 15(3) CGST Act Conditions Not Met A client wishes to offer a turnover discount for the financial year 2020-21 without a pre-existing contract. Experts on the forum discuss whether GST applies to such discounts. According to Section 15(3) of the CGST Act, 2017, discounts are not deductible from the transaction value unless agreed upon before or at the time of supply, linked to invoices, and with reversed input tax credit by the recipient. Since these conditions aren't met, GST is applicable. However, a financial credit note without GST might be issued if the discount wasn't pre-agreed. Further clarification is sought regarding income tax treatment. (AI Summary)
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