TaxTMI 
TaxTMI 
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
Sales promotional discount
05 Sep 2023 
8 Replies 
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GST treatment of franchisor reimbursement of customer discounts determines whether tax liability can be reduced via credit notes.
GST treatment depends on whether the franchisor's ledger credit for half the customer discount is a genuine price reduction affecting the taxable value of supply or a separate reimbursement; this turns on whether the discount was predetermined or post sale, the franchise agreement terms, documentary evidence of genuineness, and whether statutory conditions for issuing a GST credit note are satisfied, otherwise the parties may record the transaction via a commercial/financial credit note. (AI Summary)
GST treatment depends on whether the franchisor's ledger credit for half the customer discount is a genuine price reduction affecting the taxable value of supply or a separate reimbursement; this turns on whether the discount was predetermined or post sale, the franchise agreement terms, documentary evidence of genuineness, and whether statutory conditions for issuing a GST credit note are satisfied, otherwise the parties may record the transaction via a commercial/financial credit note. (AI Summary)