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: Clarification on Credit Notes and Pre-Arranged Discounts Under Section 15(3) of CGST Act A query was raised regarding the applicability of GST on volume discounts received through credit notes for purchases and sales. Respondents sought clarification on whether the discounts were pre-determined and if they met the conditions under Section 15(3) of the CGST Act. One response clarified that if the discount is provided via a credit note, there is no additional GST liability, as it does not constitute income from services or supplies. The discussion emphasized the importance of the pre-arrangement of discounts and the role of sellers in granting purchase discounts.