Sales promotional discount

[SUBRATA RAY]

Franchisee of branded jewellary offered discount on sale to the customer out of which 50% reimbursed by the customer by crediting it in franchisee ledger. My query is what will be gst impact on such reimbursement

AI Summary

GST Impact on Jewelry Franchisee Discounts: Credit Note May Affect Tax Liability, Documentation Key A franchisee of a branded jewelry company offers discounts on making charges to customers, with the franchisor reimbursing 50% of this discount by crediting it to the franchisee's ledger. The discussion revolves around the Goods and Services Tax (GST) implications of such reimbursements. Participants suggest that if the franchisor issues a financial or commercial credit note, there may be no GST impact. The nature of the discount and the terms in the franchise agreement are crucial. Proper documentation is essential, and the GST liability depends on whether the discount was predetermined or part of a sales scheme.