GST on Volume Discount

[ABHILASH PANICKER]

Hi,

Is Volume discount received on purchase and sales in the form of credit notes.

Does GST Applicable on such transactions. Please advise.

[KASTURI SETHI]

Pl. elaborate your query. Is such discount prior known to the buyer?  Do you fulfil the conditions of Section 15 (3) of CGST Act ? 

[Ganeshan Kalyani]

I agree with Sri Kasturi Sir, you need to explain us whether the discount on achieving volume of sale was already decided or determined to be given to your customer. Secondly, volume discount on your purchase lies upon your seller. 

[Shilpi Jain]

If you have recieved discount by way of credit note there cannot be any further GST liability on value of such CN issued since it is not any income for any services / supplies made.

AI Summary

GST on volume discounts: predetermined discounts and credit notes can reduce taxable value if valuation criteria are met.
GST treatment of volume discounts turns on whether the discount was predetermined and on valuation rules excluding qualifying post supply adjustments from taxable value. Volume discounts granted by credit note reduce the consideration for the original supply if they meet statutory criteria for adjustment and therefore do not attract additional GST. For purchasers, the seller's issuance of a credit note effects the adjustment and the buyer need not treat it as new taxable income.