TAX LIABILITY ON PERQUISITES OR BENIFITS RECEIVED FROM SUPPLIER.

[BARUN MUKHERJEE]

Respected Experts,

A taxpayer is a reseller of mobile sets and received benefits from suppliers on which TDS has been deducted u/s 194R of Income Tax Act and reflecting under 26AS and credited the amount in his Profit & Loss Account. This is also to be noted that maximum of that amount was distributed to his debtors and the amount was debited in his Profit & Loss Account. Is there any tax liability under GST on above scenario..???

AI Summary

GST liability on supplier incentives: incentives treated as taxable consideration unless adjusted as trade discount in invoices.
Performance based benefits received from a supplier are likely taxable under GST as consideration for services supporting the supplier's sales unless they are treated as trade discounts properly adjusted in purchase invoices (e.g., via credit/debit notes). Redistribution of the benefit to buyers does not eliminate GST liability on the receipt. Parties should examine pre agreements, intended recipient of the benefit, and principal/agent status, and should ensure appropriate invoicing and documentary adjustments or else treat the receipt as a fresh taxable supply and raise an invoice charging GST.